The Hill News

The key to America’s long-term, sustainable economic recovery is held by flourishing small businesses â€" our nation’s number one job creators. But in order for small firms to grow and create jobsâ€" they need access to adequate financing. 

On Wednesday, Treasury Secretary Timothy Geithner testified at a House Small Business Committee hearing on that very subject. Specifically, the hearing focused on the Small Business Lending Fund (SBLF) and the State Small Business Credit Initiative (SSBCI) created by the Small Business Jobs Act of 2010 that was passed by the Democrat-controlled Congress last year. 

As chairman of the House Small Business Committee, I hear constantly from small business owners who have trouble gaining the capital they need to start a business or expand by purchasing more equipment or hire workers. I’ve also heard from bankers who are nervous about being overextended and have been forced to tighten their lending standards si! nce the 2007 financial crisis.

It was good to hear firsthand from Secretary Geithner on the status of SSBCI and the SBLF. However, I am very disappointed by the performance of the Treasury with these programs. It has been nine months since the creation of the programs and not one lender has received funding under the SBLF, let alone a small business. Under the SSBCI, 48 states have applied for the SSBCI funds; however, only 10 states have received funding.

While I did not support these two programs when they were considered in the House (there was opposition from both sides of the aisle), I have a duty to see that taxpayer dollars being used for federal programs are utilized responsibly. 

Former Financial Services Chairman Barney Frank (D-Mass.) and House Minority Leader Nancy Pelosi (D-Calif.) claimed the Small Business Jobs Act would create 500,000 jobs through leveraging up to $300 billion in private sector lending for small businesses, yet we are nowhere near those results.Â!  

According to the National Federation of Independent Business’ (NFIB), small business optimism is at an eight month low and only five percent of small firms believe they can expand now. 

This is not surprising given the uncertainty small businesses face and the significant debt and deficit our country is dealing with. Businesses that do have cash are weary of using it to grow or hire out of fear of not knowing what is coming next. Secretary Geithner agreed with me that reaching an agreement on our debt, “[W]ould improve overall confide! nce across the country.”  

With unemployment ho! vering a t nine percent, the administration must start working with Congress to strike the right regulatory balance so banks can start lending again and reach an agreement on our debt without raising taxes. Together, this combination will get our nation back to the strong economic engine that we are accustomed to and get Americans back on the job.

Graves is the chairman of the House Small Business Committee.