Bush Administration Quietly Dismantles SBA
Indicators Point to Withdrawal of Executive Support for Small Business
October 26, 2005
PETALUMA, Calif., Oct. 26 /PRNewswire/ -- While President Bush has made dozens of speeches referring to his support for small businesses of America, the reality is quite different. Since the Bush Administration came into power, the Small Business Administration's budget has been cut in half. The 2006 budget is $593 million, down from $1.1 billion in 2001. To put this into perspective, the Pentagon budget is just under $400 billion. Undisclosed sources at the SBA have acknowledged that the Bush Administration is attempting to "starve the SBA to death".
As a result of the budget cuts, personnel at the SBA that handle size protests, minority and disadvantaged business and government contracts have been specifically targeted for layoffs and early retirement. The SBA has now been downsized to the point that it is unable to effectively manage its major programs.
For example, response to the victims of Hurricanes Katrina and Rita has been painfully slow and the rejection rate for loan applicants has been staggering. The Associated Press reported that of the more than 9,500 applications for home and business loans in Texas and Louisiana, only six have been approved in spite of the fact that the agency has doubled the size of its staff with temporary employees to help process the disaster loans.
The awarding of contracts in the clean up of Hurricane Katrina has also been mismanaged. Without going through the normal bidding process, major contracts were quickly doled out to large corporations with links to Washington, while only 1.5 percent of the $1.6 billion awarded by the Federal Emergency Management Agency were awarded to minority businesses, less than a third of the 5 percent normally required.
Further attesting to this allegation is the misappropriation of $5 billion in post 9-11 recovery loans earmarked for small businesses. A recent report showed that of the 19,000 loans approved by the two programs, fewer than 11 percent went to companies in New York City and Washington, D.C. Instead, businesses as diverse as a South Dakota country radio station, a Virgin Islands perfume shop and a Utah dog boutique were beneficiaries of the government-guaranteed loan program.
These figures clearly illustrate the priorities of the current administration are not in support of American small business. "It's obvious that the Bush Administration is trying to reduce federal programs that assist small business by gutting budget and staff," stated Lloyd Chapman, president of the American Small Business League. "We're preparing to take legal action to prevent them from further harming small businesses that are trying to conduct business with the federal government."
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.
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