Reid touts high tech grants for small business

Keeping up a drumbeat to the message that Democrats are focused on bills that create jobs, Sen. Harry Reid today previewed legislation that renews two entrepreneurial federal grant programs.

The Small Business Innovation Research (SBIR) Program and the Small Business Technology Transfer (STTR) Program award research and development grants to high tech firms. A bill reauthorizing the programs for another eight years is being considered in the U.S. Senate this week.

In some cases, the grants serve as seed money for inventors with bright ideas; in other cases they help speed development of innovative products and get them before customers, often within the federal government itself.

An almost identical bill renewing the programs passed the Senate by unanimous consent last December, but it remains to be seen what will happen now.

Last week, a bloc of 10 Republicans including Sen. John Ensign of Nevada put Reid, the Senate majority leader, on notice in a letter they will block any bills that do not directly cut spending or reduce the federal deficit.

"I can't imagine anything so senseless," said Reid, D-Nev. "I am offended by that letter." He did not say how he plans to tackle the obstacle.

The grant legislation is the latest piece of what Democrats are advertising as their "Winning the Future" agenda. The Senate already this year has updated U.S. patent law and reauthorized an aviation policy bill that endorses upgrades to air traffic systems.

It also gives Democrats another opportunity to position themselves as the party of job-creation.

"The jobs of the future that are going to lead the way out of the recession in large measure are going to be created by cutting edge entrepreneurs out there," said Sen. Mary Landrieu, D-La., chairwoman of the Small Business and Entrepreneurship Committee.

"Some of the most innovative and striking and startling and remarkable technology can be found in small businesses operating out of someone's den or garage," Landrieu said.

As a measure of the incubator effect, in the past decade firms that have been backed by research program grants have accounted 25 percent of key innovations and 38 percent of U.S. patents, Reid said.

The programs were established by President Ronald Reagan. Since 1983, 224 grants worth $76.5 million have been awarded to Nevada firms.

In one example put forward by Reid, K2 Energy Solutions in Henderson received $69,000 grants in 2008 and 2009 toward the development of high rate rechargeable lithium ion batteries for military use.

Even though the federal grants amounted to a small slice of company revenue, chief technology officer James Hodge said it helped speed the development of the battery technology and got it before potential customers, "much sooner than if we had developed them ourselves."