April 18, 2024

You’re the Boss: Senate Posturing Kills S.B.I.R. Renewal, For Now

The Agenda

Efforts to renew — and overhaul — the well-regarded Small Business Investment Research and Small Business Technology Transfer programs, which expire at the end of this month, may be in jeopardy now that the Senate appears unlikely to vote on its reauthorization bill anytime soon. And the person behind that bill’s demise, according to Democrats, at least, happens to be one of its chief architects — Senator Olympia Snowe, the top Republican on the Senate Small Business Committee.

S.B.I.R. requires federal agencies to set aside 2.5 percent of their grants to outside researchers for small companies. S.T.T.R. is a smaller initiative that requires the five agencies funding the most research to set aside additional money for partnerships between small firms and nonprofit institutions.

In March, Ms. Snowe proudly told colleagues on the Senate floor, “I authored this landmark, bipartisan reauthorization measure.” The bill had passed her committee by a vote of 18-1. (The lone dissenter was Senator Rand Paul, Republican of Kentucky.) In April, however, she objected when Harry Reid, the majority leader, sought unanimous consent for a path to a final vote. Mr. Reid proposed permitting votes on nine amendments to the bill, five from Democrats and four from Republicans, including one from Ms. Snowe. But his list did not include Ms. Snowe’s “small business regulatory freedom” amendment, far-reaching legislation that would dramatically expand the opportunity for small businesses to offer input on (or attempt to impede) new government rules.

Mr. Reid, arguing with Ms. Snowe on the Senate floor, said that both Democrats and unnamed Republicans objected to this amendment. “The legislation of my friend from Maine is not relevant or germane to this legislation,” he said. “If she objects to the request I have offered, this bill will not go forward.”

And that’s precisely what happened. The cloture vote, on May 4th, failed along party lines, 52-44. (Sixty votes are needed to end debate.) That day, Ms. Snowe decried on the Senate floor “a disturbing trend in this body over the past several years of disregarding the minority rights and flat out disallowing votes on our amendments.” She added, “we have voted on 11 amendments out of 137 amendments filed prior to the Easter recess, which hardly represents an open amendment process.”

Speaking to Politco, in an article describing an “increasingly nasty falling out” between Ms. Snowe and Mr. Reid as she prepares for a potential primary challenge from the right next year, the Maine Republican put the blame on the Democratic leader. “I have a right to insist on a position as much as the majority leader does or anyone else does in the United States Senate, and I want to vote on an amendment,” she said. “I don’t know how that is considered to be obstructionist.”

Of course, whether Ms. Snowe is really responsible for killing the bill is a he-said-she said matter. Jon Summers, a spokesman for Mr. Reid, said the majority leader had an agreement with Republican leaders on the proposal to end debate, which Ms. Snowe scuttled. John Ashbrook, a spokesman for Mitch McConnell, the minority leader, disputed that.

Still, even Senator Mary Landrieu, the Democratic chair of the Small Business Committee who has had a close working relationship with Ms. Snowe, faulted her colleague. The bill “reached a dead end because Ms. Snowe is so adamant about including her regulatory reform amendment,” said Ms. Landrieu’s spokesman, Richard Carbo. “Unfortunately, that amendment falls under the jurisdiction of numerous committees and so many have issues with it on both sides of the aisle. She is willing to kill her own bill over an amendment that is completely unrelated to the programs we’re reauthorizing.”

As Ms. Landrieu herself pointed out to Politico, and as Agenda readers may recall, this is the second case of legislative filicide by Ms. Snowe in recent months concerning small business. The first was last fall’s jobs bill, which she opposed after the Democrats added their small business lending fund. (There’s an irony here: in rejecting Ms. Snowe’s sweeping regulatory amendment, Mr. Reid argued that it had never been vetted in a Senate hearing, which is precisely how Ms. Snowe framed her opposition to the small-business lending fund.)

Of course, if the Senate does eventually reauthorize the S.B.I.R. program, its bill will still have to be reconciled with legislation from the House. Two years ago, when the two chambers last wrestled with the program, they could not come to terms, and the dispute has profound implications for the future of the program. The House wanted to open up the program to companies controlled by venture capital funds. (The Small Business Administration, which sets the rules for the S.B.I.R. program, currently only allows venture-managed companies to participate if the fund and the companies in its portfolio together have fewer than 500 employees.) The House bill also greatly raised the cap on the size of grants, but without increasing the total amount of money set aside for the program. In effect, it would have allowed more, and bigger, companies to vie for fewer opportunities.

The Senate responded with a bill to permit venture-backed companies to seek a small share (8 percent) of S.B.I.R. funds at most agencies and a slightly bigger share (18 percent) of program grants from the National Institutes of Health. It also proposed increasing both the award limit (though not as much as the House bill) and the S.B.I.R.’s slice of the overall pie.

This season, the chambers were inching toward compromise. The Senate bill raises the share of money available to companies backed by big venture funds — to 25 percent of total S.B.I.R. funds at the National Institutes of Health, the National Science Foundation, and the Department of Energy, and 15 percent at other federal agencies. The House bill sets the thresholds for these agencies at 45 percent and 35 percent respectively. (Though the House has changed hands, its approach, as in the Senate, enjoys broad bipartisan support among its members.)

Even though the S.B.I.R. and S.T.T.R. programs are set to expire legally, that doesn’t mean they are likely to end. Both programs are popular and are likely to be extended, temporarily, on their current terms. (Indeed, on Wednesday, Ms. Landrieu filed a bill to extend the programs for a year.) For advocates of the very smallest companies, who worry about their being crowded out by bigger, better-connected rivals, stasis may not be a bad outcome at all.

Article source: http://feeds.nytimes.com/click.phdo?i=c2c6e8e5421adfc81d57143705f4a7f2

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