The House Science, Space and Technology Committee and the House Small Business Committee recently approved legislation to accelerate technological innovation among small businesses.
HR 2763 was brought to the forefront of both committees in order to update two programs that help thousands of small businesses convert taxpayer-funded scientific research into breakthrough commercial products and processes. This legislation, however, is part of a larger agenda Congress must address to help small businesses and our economy recover from years of anemic growth.
HR 2763, introduced by Rep. Steve Knight, would improve the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Through these programs, nearly $3 billion in federal grants are awarded each year to about 5,000 small businesses and aspiring entrepreneurs to support technological innovation and development of new products and services.
The SBIR program was initially passed by Congress in 1982 and has grown from $45 million to more than $2.5 billion annually. The goal of the program is to conduct federal research using small businesses and to support the resulting science, technology and products’ potential for commercialization.
The STTR program requires collaboration between a small business and a nonprofit research institution to bridge the gap between fundamental science and commercialization. These programs are beneficial to federal research and technological innovation and help small businesses expand their products’ reach to government and private and nonprofit organizations.
Helping 5,000 U.S. companies put taxpayer-supported research to work is worthwhile. But there are 23 million U.S. small businesses. These enterprises employ nearly one-half of all private sector workers.
The risk-taking American entrepreneurs who built these businesses are our country’s competitive edge in the global economy. These small business owners don’t want federal grants; they need the federal government to get out of their way.
What stands in the way of 23 million small businesses? U.S. business tax rates are the highest in the developed world, a huge disadvantage for every U.S. business that faces intense competition from China, Europe and other nations. High taxes eat up profits and deprive businesses of capital that could be invested in productivity and growth — developing new products and markets and hiring more people.
Just as damaging as high rates is the overwhelming complexity of our tax system. Federal tax regulations now total 75,000 pages. Obamacare alone added about 5,000 pages of IRS regulations and guidance.
The nonpartisan National Taxpayers Union Foundation estimates the U.S. tax code is now more than two times the length of the King James Bible and the entire works of Shakespeare combined. Small business owners have no choice but to spend tens of billions of dollars each year on outside tax experts.
Federal overregulation of every aspect of operating a business hits small companies especially hard. According to the National Small Business Administration, regulatory costs for a new startup business average $83,000 per year.
A study released in 2010 by the U.S. Small Business Administration estimated total annual regulatory costs for small businesses to be $1.75 trillion. (Not surprisingly, the Obama administration buried that study.) At best, overregulation is a big drag on small business growth. At worst, inflexible federal rules force businesses to close.
For the first time in many years, the White House and Congress are working together to overhaul the tax code and relieve regulatory burdens. Rewriting the tax code is a huge job, but we hope to vote on comprehensive, pro-growth reforms by the end of this year.
Congress has already used its authority to repeal more than a dozen regulations, with more in the works. And the president has ordered federal agencies to peel back two existing regulations for every new one issued.
A decade of huge mistakes made in Washington, D.C., has slowed down America’s small businesses. It is time for the federal government to get out of the way and allow our dynamic small businesses to lead a renewal of U.S. economic growth.
Rep. Steve Knight, R-Lancaster, represents the 25th Congressional District, which includes Simi Valley. Rep. Lamar Smith, R-Texas, is chairman of the House Science, Space and Technology Committee. Read More
WASHINGTON - U.S. House Science, Space, and Technology Committee Chairman Lamar Smith (R-Texas) and Energy Subcommittee Chairman Randy Weber (R-Texas) sent a letter to U.S. Department of Treasury Secretary Steven Mnuchin to request that the Department investigate allegations that Russian state sponsored entities interfered in the U.S. energy market by funneling Russian funds to radical environmental groups opposed to all fossil fuels.
Chairman Smith: “If you connect the dots, it is clear that Russia is funding U.S. environmental groups in an effort to suppress our domestic oil and gas industry, specifically hydraulic fracking. They have established an elaborate scheme that funnels money through shell companies in Bermuda. This scheme may violate federal law and certainly distorts the U.S. energy market. The American people deserve to know the truth and I am confident Secretary Mnuchin will investigate the allegations.”
According to publicly available reports, the Russian government and complicit parties funneled money originating from Russia through Bermuda-based shell companies to environmental groups in the United States with the aim of disrupting the U.S. energy industry and influencing public opinion of the oil and gas industry. This scheme potentially violates federal statutes pertaining to agents of foreign governments or those lobbying on behalf of domestic and foreign interests. The U.S. Treasury Department is well positioned to track the international money flowing into the U.S.
“U.S. presidential candidates, European officials, and the U.S. intelligence community have all publicly noted that Russia and its government corporations are funding a covert anti-fracking campaign to suppress the widespread adoption of fracking in Europe and the U.S.—all in an effort to safeguard the influence of the Russian oil and gas sector,” the letter states.
The letter to Secretary Mnuchin can be found here. Read More