United States Senate Committee on Business and Entrepreneurship

Committee information

• Date created: 1940
• Also known as: Senate Small Business Committee
• Members: Nineteen members in the 119th Congress (2023–2024)
• Subcommittees: No subcommittees

Role

The United States Senate Committee on Small Business and Entrepreneurship’s jurisdiction includes oversight of all legislation, petitions, messages, and memorials related to the Small Business Administration (SBA), the organization that provides mentorship, guidance, assistance, and loans or loan guarantees to small businesses across the country. The SBA has four primary functions: providing access to capital for business-related financing; offering educational development through information, training, and technical assistance; adhering to rules related to the procurement of federal government contracts and ensuring a certain percentage of these contracts are awarded to American small businesses; and providing advocacy, or a voice in Congress, for issues affecting small businesses.

In addition to its SBA management and oversight functions, the Small Business and Entrepreneurship Committee surveys and studies issues related to American small businesses, sometimes reporting their findings back to Congress.

Within this full committee, both Republicans and Democrats have their own set of issues on which they focus, though there are elements that cross over between both parties. In 2024-2025, Republican priorities included revamping the Small Business Administration (SBA) by identifying and eliminating bloated and duplicative programs and undoing costly regulations that have hurt small businesses. Also on the Republican agenda was to introduce the Complete COVID Collections Act to extend the authorization of the Special Inspector General for Pandemic Recovery through 2030 and expand jurisdiction to ensure that fraudsters, who reportedly stole more than $200 million in aid, are held accountable for every stolen tax dollar. Among the Democrats' goals were to build an opportunity economy for small businesses and assist entrepreneurs in underserved communities. They aimed to assist small businesses in adapting to technology and address wealth disparities by closing gaps. They hoped to reintroduce the Small Business Innovation and Research (SBIR) and Small Business Technology Transfer (STTR) programs.

History

The Senate Committee on Small Business and Entrepreneurship was first established on October 8, 1940. At that time, it was known as the Special Committee to Study Problems of American Small Business. This committee was formed after the Stock Market Crash of 1929 forced the country into the Great Depression during the 1930s. Small business owners all over America were forced to close their doors during this time. In 1932, President Herbert Hoover created the precursor to the Small Business Administration called the Reconstruction Finance Corporation (RFC), which was established as a federally funded lending program to keep small businesses open during this difficult time. The next president, Franklin D. Roosevelt, adopted the program. In 1942, after America had entered World War II (1939–1945), the Smaller War Plants Corporation (SWPC) was created by Congress to provide additional loan opportunities to small businesses so they could compete with larger American companies during wartime. That same year, Congress also passed the Small Business Mobilization Act of 1942, which established price differentials to balance war efforts with business needs. During the war, the Department of Defense and the Department of Commerce were actively involved in helping American businesses stay afloat. After World War II, the SWPC was abolished, with the RFC being given jurisdiction over all lending and contracts. For the 79th Congress (1945–1947), Montana Democrat James E. Murray held the committee chair position. For the 80th Congress (1947–1949), Republican Kenneth S. Wherry of Nebraska held the committee chair position.

The Special Committee to Study Problems of American Small Business was terminated on January 31, 1949. The following February, the functions of the committee were transferred to the newly formed Select Committee on Small Business. That year also saw the escalation of conflict in Korea, which led America into the Korean War (1950–1953). America’s involvement in this conflict spurred Congress to create the Small Defense Plants Administration (SDPA), whose functions were similar to the defunct SWPC in addressing the concerns of American businesses during wartime. The Office of Small Business (OSB) within the Department of Commerce worked in conjunction with the committee to address the issues and concerns of American small businesses. This included the passage of the Defense Production Act of 1950, which ensured small businesses got federal contracts on military materials, even if they charged higher prices than larger companies did.

In 1952, the RFC was dissolved. The functions of the RFC were moved under the new agency created by President Dwight Eisenhower called the Small Business Administration. This agency was created through the Small Business Act of 1953. Its mission was to “aid, counsel, assist, and protect, insofar as is possible, the interests of small business concerns.” One of the first responsibilities of the SBA was to establish industry-based size classifications for American businesses.

Two pieces of major legislation created during this iteration of the committee included the Small Business Investment Act of 1958, which established the Small Business Investment Company (SBIC) program to provide funds for venture capital investment firms, and the SBA’s Equal Opportunity Act of 1964, which helped low-income applicants secure loans for businesses. In 1976, the SBA Office of Advocacy was established. Its focus was to provide protections for the agency’s programs for businesses.

The legislation and agencies created before, during, and after World War II to help small businesses, like the SWPC charter and the Armed Services Procurement Act of 1947, were later shown to have not helped small businesses much at all. One of the major issues of note was that businesses owned by minorities or those from disadvantaged areas were never considered for any government contracts. Because of these findings, the Small Business Act and Small Business Investment Act of 1958 were amended through Public Law 95-507 in 1978. The changes made through this amendment provided specific guidelines for ensuring that the efforts to improve businesses were applied fairly and equitably to all businesses, and it provided stipulations for what would happen if those requirements were not met. The change also included the establishment of the Office of Small and Disadvantaged Business Utilization (SADBU). Later, the Office of Small Business Programs was created within the Department of Defense.

During the 81st Congress (1949–1951), the chair of the Senate committee was John J. Sparkman, a Democrat from Alabama. Sparkman held the position through the 82nd Congress, as well, losing the seat to Republican Edward Thye in 1953. Sparkman then was once again elected to the chair in 1955 and remained in this position for a decade. Various politicians then held the position of chair through the 1960s and 1970s.

Thirty-one years after the original name change, in March 1981, the committee’s name changed again to the Committee on Small Business, and it became a standing Senate committee. During the 1980s, several pieces of legislation passed that supported the committee’s responsibilities. Public Law 99-661, the Department of Defense Five Percent Minority Contracting Goal, was passed in 1987 and set standards and goals for federal procurement for small and disadvantaged businesses. Public Law 100-656, the Business Opportunities Development Reform Act of 1988, further strengthened goals, guidelines, and standards for small businesses receiving government contracts. Public Law 103-355, the Federal Acquisition Streamlining Act of 1994, added the women-owned small business designation and provided increased goals for businesses in high-unemployment areas. Public Law 106-50, the Veterans Entrepreneurship and Small Business Development Act of 1999, established goals, standards, and guidelines supporting small businesses owned by American veterans.

Of note, in 1996, the House of Representatives put forward a bill to eliminate the Small Business Administration, though the bill failed to pass in the end. That same year saw the passage of Public Law 104-188, the Small Business Job Protection Act of 1996, which included provisions for small business–related taxes and other financials, extended or reformed expiring provisions, simplified pension plans, and held provisions for foreign companies operating on US soil.

Twenty years after the second name change, in June 2001, the chair of the committee, Democratic senator John Kerry, once again changed the committee’s name to the Committee on Small Business and Entrepreneurship. In 2004, the SBA’s expenditures were frozen, though they were later reinstated, as they were crucial to keeping American small businesses flourishing. By 2009, the administration of President Barack Obama once again put small businesses at the forefront of government focus. His administration saw the passage of the American Recovery and Reinvestment Act of 2009, which strengthened the budgets and efforts of the committee and the SBA. It also helped pull the country out of the Great Recession it was experiencing. In 2010, there was additional strengthening of the SBA through the passage of the Small Business Jobs Act. Starting in 2011, support from the Obama administration led to double the number of loans for American small businesses over the next five years.

On January 9, 2019, the 116th Congress began and the Senate Committee on Small Business and Entrepreneurship elected Marco Rubio, a Republican Senator from Florida, as the committee chair. The ranking member was Ben Cardin, a Democratic Senator from Maryland, who had served on the committee since he was first elected to the Senate in 2006.

In January 2019, ten bills had passed the House of Representatives and were sitting in the Senate for this committee to review. These bills included the Expanding Contracting Opportunities for Small Businesses Act of 2019, the Investing in Main Street Act of 2019, the Clarity on Small Business Participation in Category Management Act of 2019, and the Incentivizing Fairness in Subcontracting Act. Other bills the committee was set to review included the Stimulating Innovation through Procurement Act of 2019, the Encouraging Small Business Innovation Act, the Small Business Relief from Disease Induced Economic Hardship Act of 2019, the Preventing SBA Assistance from Going to China Act of 2019, the Advocacy Empowerment Act of 2019, and the Small Business Credit Protection Act.

In 2020, during the COVID-19 global pandemic, the Paycheck Protection Program was passed to provide small businesses with up to eight weeks of payroll costs including benefits. Other legislation to assist small businesses included Strengthening Subcontracting for Small Business Act of 2022. The legislation required federal agencies, when evaluating offers for contracts, to consider using small businesses as subcontractors.

Among the accomplishments of the 118th Congress and the Senate Committee on Small Business and Entrepreneurship was the 2024 National Defense Authorization Act (NDAA) that eliminated self-certification for service-disabled veteran-owned small businesses and an increase in government procurement for these businesses.

Subcommittees

The US Senate Committee on Small Business and Entrepreneurship does not have official subcommittees noted on any official documentation.

Bibliography

Bail, Philip G., Jr. “The Demise of the Federal Government Small Business Program.” Georgia Tech, Contracting Education Academy, Jan. 2010, contractingacademy.gatech.edu/wp-content/uploads/2012/06/The-Demise-of-the-Federal-Government-Small-Business-Program-DAU-Jan.-2010.pdf. Accessed 23 Jan. 2019.

Bischoff, Dan. “History of the Small Business Administration.” Lendio, 21 Sept. 2011, www.lendio.com/blog/small-business-tools/infographic-history-small-business-administration-sba-1/. Accessed 23 Jan. 2019.

“Democratic Issues.” U.S. Senate Committee on Small Business & Entrepreneurship, www.sbc.senate.gov/public/index.cfm/democraticissues. Accessed 23 Jan. 2019.

“History.” Small Business Administration, www.sba.gov/about-sba/what-we-do/history. Accessed 23 Jan. 2019.

“History.” U.S. Senate Committee on Small Business & Entrepreneurship, www.sbc.senate.gov/public/index.cfm/history. Accessed 23 Jan. 2019.

“H.R. 3448—Small Business Job Protection Act of 1996.” Congress.gov, www.congress.gov/bill/104th-congress/house-bill/3448. Accessed 23 Jan. 2019.

“Jurisdiction.” U.S. Senate Committee on Small Business & Entrepreneurship, www.sbc.senate.gov/public/index.cfm/jurisdiction. Accessed 23 Jan. 2019.

“Legislation.” U.S. Senate Committee on Small Business &Entrepreneurship, www.sbc.senate.gov/public/index.cfm/legislation. Accessed 23 Jan. 2019.

“Republican Issues.” US Senate Committee on Small Business & Entrepreneurship, www.sbc.senate.gov/public/index.cfm/republicanissues. Accessed 23 Jan. 2019.

“Senate Committee on Small Business and Entrepreneurship.” Govtrack, www.govtrack.us/congress/committees/SSSB. Accessed 23 Jan. 2019.

“Senate Small Business and Entrepreneurship Committee.” Legistorm, www.legistorm.com/organization/summary/96754/Senate‗Small‗Business‗and‗Entrepreneurship‗Committee.html. Accessed 23 Jan. 2019.

"Small Businesses Will Create at Least 1 Million New Jobs Annually if Trump Tax Cuts Are Made Permanent." US House Committee on Ways & Means, 27 Jan. 2025, waysandmeans.house.gov/2025/01/27/small-businesses-will-create-at-least-1-million-new-jobs-annually-if-trump-tax-cuts-are-made-permanent/. Accessed 27 Jan. 2025.