PETALUMA, Calif., Feb. 9, 2006 — For the 6th year in a row, President Bush has requested a budget for the Small Business Administration that further cuts staff and programs to benefit America's 23 million small businesses. Lawmakers on both sides of the aisle have criticized the proposal.
Although the $624 million budget request is $31 million more than the initial request for 2006, the budget is artificially inflated with a sizeable allocation that was not part of this year's budget. Taken apart, the operating budget would be $429 million, or 28% less than the initial $593 million for 2006. Moreover, the 2007 request cuts SBA staff by 24%, increases costs to borrowers for future disaster loans, increases fees for small business loans, and axes a number of programs including the Microloan and Microloan Technical Assistance Programs, which serve a large proportion of minority and women-owned small businesses.
Republican Olympia Snowe, chair of the Senate Committee on Small Business & Entrepreneurship, noted that the SBA budget is only 3/100th of a percent of the overall Federal budget, but "the SBA and its programs have a tremendous return on investment." Snowe added, "This steady decline to the SBA's budget could jeopardize its ability to provide economic stimulus in the future."
John Kerry, leading Democrat on the Senate Committee, had this to say, "While President Bush brags about government costs going down for the Small Business Administration, he fails to tell the truth that slashing Federal resources over the years raises costs for small business owners."
The current budget cuts are consistent with rumors that the Bush Administration intends to wind down the SBA and reduce, if not eliminate, Federal small business contracting programs.
"The actions of President Bush are in stark contrast to his rhetoric. Even members of his own party are upset by these relentless cuts," stated Lloyd Chapman, President of the American Small Business League. "This new budget clearly shows Bush's lack of commitment to the businesses where most Americans work. I expect it to have a significant negative impact on legitimately small, women-owned, and minority-owned businesses."
About the ASBL
The American Small Business League was formed to promote and advocate policies that provide the greatest opportunity for small businesses – the 98% of U.S. companies with less than 100 employees. The ASBL is founded on the principle that small businesses, the backbone of a vital American economy, should receive the fair treatment promised by the Small Business Act of 1951. Representing small businesses in all fields and industries throughout the United States, the ASBL monitors existing policies and proposed policy changes by the Small Business Administration and other federal agencies that affect its members.