Legislation to set aside a fixed percentage of federal research dollars for small business--which sailed unanimously through the Senate last year--ran into strenuous opposition on the House floor yesterday.
But sponsors succeeded in fending off bipartisan attempts to cripple the proposal by exempting the government's defense and health agencies, after an intensive lobbying effort by powerful interest groups on both sides.
Yesterday's victories brighten the bill's chances for final passage. However, it faces at least one more critical amendment when it comes up for further consideration next week. That amendment would substitute "targets" for the mandatory set-aside requirements.
The "Small Business Innovation Act" presented a difficult choice for members of Congress in an election year, pitting the always-popular small business constituency and the Chamber of Commerce against the nation's universities, medical schools, health groups and even some small high-technology firms that stand to benefit from the set-aside.
After initially opposing the measure, the Reagan administration added its support.
In the intense and sometimes bitter day-long debate, proponents argued that the "landmark" proposal was needed to give "small business a chance" and help improve national productivity. But critics called it an "outrageous" attempt to give special treatment to one group at the expense of others.
Most members apparently bought the argument that the proposal was "the most important thing we can do for America's small businesses," as supporter David Dreier (R-Calif.) put it.
The bill would require that about one percent of federal funds for research and development be set aside each year for small businesses. The requirement would apply to agencies with annual budgets of more than
Proponents argued that the "landmark" proposal was needed to help improve national productivity. But critics called it an "outrageous" attempt to give special treatment to one group at the expense of others. $100 million and would amount, after a four-year phase-in period, to nearly $400 million annually out of the roughly $40 billion R&D effort.
House sponsors originally sought to set aside 3 percent of R&D funds, but recently modified their proposal to broaden support. The measure now closely resembles a Senate bill that passed last December by a 90-to-0 vote.
The House Small Business Committee pushed the bill forward in the face of mounting opposition from six other committees. And more than a dozen of the proposal's 200-plus supporters publicly withdrew sponsorship as questions grew about the potential impact.
In yesterday's floor debate, both sides traded statistics and interpretations of the bill's significance. Small Business subcommittee chairman John LaFalce (D-N.Y.) argued that the set-aside would inflict only "slight pain to certain special interest groups" while aiding struggling small businesses that have been discriminated against in the past.
But Rep. Paul McCloskey Jr. (R-Calif.) contended that small businesses were already getting more than their "fair share," and Science and Technology Committee Chairman Don Fuqua (D-Fla.) said that while the one percent may sound "minuscule" it amounts to "nearly half a billion dollars."
In an attempt to exempt the National Institutes of Health biomedical research funding, which failed 193 to 164, Rep. John Dingell (D-Mich.) pleaded that "if you are interested in health . . . oppose this outrageous piece of legislation." He argued that small businesses should compete on their own for the funds, particularly "in light of budget reductions made last week" in health funds.
The effort to exempt Pentagon R&D programs failed by a greater margin, 295 to 80, despite arguments by ranking Armed Services Committee member William Dickinson (R-Ala.) that it represents an unfair burden. In urging opposition to the bill, he declared that "nobody is against small business, we're all for patriotism and the American flag."