News Column

Making The Case For Small Business

April 2003, HISPANIC BUSINESS Magazine

Patricia Guadalupe

Ms. Velázquez is well known in Congress for her committee's annual "scorecard."
Ms. Velázquez is well known in Congress for her committee's annual "scorecard."

Rep. Nydia Velázquez (D-NY) was a teenager when she first became interested in business issues, particularly the challenges facing small businesses.

"My father was a sugarcane cutter [in Puerto Rico], and he saved money to open up a small factory to make cinder block. I saw him suffer because of the complexity of regulations and payroll, and access to capital. I saw how difficult it was for my father to be able to overcome those obstacles and succeed," she recalls.

That memory was fresh in her mind when she became the first Puerto Rican woman elected to the U.S. House of Representatives, in 1992. Shortly thereafter, she successfully lobbied for an appointment to the House Small Business Committee, convinced that her background uniquely suited her for the often-labyrinthine process of crafting sensible small-business legislation.

Just six years later, Ms. Velázquez was named the committee's Ranking Democrat, becoming the first Hispanic woman to serve as chair or ranking member of a full committee in the history of the House. The committee has since passed 27 pieces of legislation, 20 of which became law.

Ms. Velázquez helped create the Small Business Administration (SBA) Women's Procurement Program, which assists women-owned businesses in obtaining federal contracts. She also beat back a Republican effort in the 1990s to eliminate the SBA's 8(a) program. And she was instrumental in reducing 7(a) program fees by 50 percent.

"I am so proud to represent small businesses in Congress. I will fight the good fight for them whatever it takes one program a time, one issue at a time, because I believe in the power of America's small enterprises," she says.

In recognition of her tireless and effective advocacy on behalf of the nation's small-business community, Ms. Velázquez has been named the inaugural recipient of Hispanic Business magazine's Woman of the Year award. She was selected from among this year's roster of 80 Elite Women.

As then-President Bill Clinton described Ms. Velázquez in a New York speech, "She has one emotional level intense. She communicates one feeling only passion. When she asks you for something, you get the feeling that you can tell her yes now, or tell her yes later."

Ms. Velázquez says she has consistently championed small businesses because such enterprises are the backbone of the U.S. economy.

"We all know that the engine driving the economy is small business, with 90 percent of new jobs created by small businesses. Small businesses helped pull the U.S. economy out of the recession in the '70s, and I believe they are the ones to help turn around the economy now," she says.

In recent years that belief has spurred her to seek increased funding for the SBA and its programs. It's a position that has put her at odds with the Bush administration.

"At a time like this, when we are facing an economic downturn, that's the time to invest more in small businesses. … [SBA administrator] Hector Barreto is a nice and bright man and a former small-business person, but he's been put in a position where he has to come before us and defend a budget that he knows is inadequate," she says.

In fact, the New York legislator says one of her biggest frustrations has been dealing with a White House that seems only to feign interest in small-business issues. It's an ironic turn of events, considering President Bush's background, she says.

"We have in President Bush someone who was a small-business person himself. And last March [2002] he released his small-business agenda, saying the administration was going to provide regulatory relief and deal with the issue of contract bundling to break up the mega-contracts and provide more economic opportunities within the federal marketplace for minority- and women-owned businesses. But they haven't met one single goal of federal contracting practices," says Ms. Velázquez.

Born in Yabucoa, Puerto Rico, Ms. Velázquez was the first person in her family to receive a college diploma. She entered the University of Puerto Rico in Rio Piedras at age 16 and graduated magna cum laude in 1974, with a bachelor's degree in political science.

After earning a master's degree in political science from New York University in 1976, she joined the faculty of Hunter College at the City University of New York in 1981 as an adjunct professor of Puerto Rican studies.

In 1983, Ms. Velázquez served as special assistant to U.S. Representative Edolphus Towns, and the following year she became the first Latina to serve on the New York City Council. In 1986, she became the director of the U.S. Department of Puerto Rican Community Affairs.

Her district in New York encompasses parts of Brooklyn, Manhattan, and Queens.

Contract bundling has emerged as a key issue for Ms. Velázquez. Last year, House Small Business Democrats issued a report titled "Federal Contract Watch List: How Big Contracts Hurt Small Businesses, 10 To Watch." It outlines 10 such contracts that the congresswoman says hurt small firms, by either displacing their work or threatening to do so through sheer dollar amount. Seven of the 10 from the management of the U.S. Marine Corps' enormous food services to shipbuilding services for the U.S. Navy are administered by the Department of Defense, which the report says has a tendency to consolidate contracts.

The report, asserts Ms. Velázquez, shows the Bush administration is not serious about helping small businesses compete for federal contracts.

"The president announced that he was instructing the Office of Management and Budget that federal agencies have to be more sensitive, that the government shouldn't shut the door to small business, that contract bundling is not the way to go, but I haven't seen one mega-contract broken up and given to small businesses. You can talk the good talk, but actions have to match your rhetoric, and I haven't seen that in this president. When you look at economic initiatives coming out of the White House, they're not really helping small businesses. The president talks a lot about his tax-cut programs, but the average small-business owner will get only $500."

Ms. Velázquez is well known in Congress for her committee's annual "scorecard" on federal contracting opportunities for small businesses. The extensive reports study the 21 agencies that account for 96 percent of all federal spending. Overall, the government routinely receives a barely passing grade, most recently landing a "D" after getting a "C" the previous year.

The most recent scorecard notes that the federal government has failed to meet its federally mandated small-business contracting goal of 23 percent, costing small firms at least $417 million in federal contracts. Predictably, the Department of Defense received an "F." Only the Department of the Interior received an "A," for exceeding its goal in areas such as 8(a) and contracts to women.

"I'd like to tell you that contracting opportunities for small businesses have dramatically improved, but nothing could be further from the truth," says Ms. Velázquez, adding that while federal procurement budgets continue to record double-digit growth, the number of contracts awarded to small businesses has barely inched up.

Despite the challenges, Ms. Velázquez relishes her role as the energetic, fast-paced New York legislator who refuses to give up.

Ms. Velázquez, who once shook a packed hearing room by thundering to a stonewalling Defense Department official that she would, come appropriations time, "make your life miserable" if he did not turn over documents related to allegations of abusive behavior toward civilians on the island of Vieques, expects to be around for a long time to assist small businesses.

"I will fight on every issue, on every budget, to make it right for small businesses. Part of my job as the ranking member on the committee is to educate those who are not on the committee about the importance of small businesses in America and about our commitment to the community to provide them with the economic tools that will help them and enable them to grow and expand. This is a long, long uphill battle, but those who know me know I don't give up easily."


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