Since 2001, the Bush administration and Congress have chopped about half of the general budget of the Small Business Administration, a federal agency that many Maryland companies have counted on to provide loans and other assistance since 1953.

Could there be a plan afoot to abolish the SBA entirely?

Some think so.

''I've heard something about that," said Morris A. ''Mike" Little, president and CEO of B&W Solutions, an Oxon Hill company that has benefited from SBA programs, as it provides federal human resources management and training services, along with general business and community relations services.

''Some recent events and reports lead me to believe there could be some credibility to that," said Little, who is also board chairman of the National Black Chamber of Commerce in Washington, D.C.

The budget cuts, reports by government agencies, think tanks and industry publications, and statements by government officials are cause for concern, said Lloyd Chapman, founder and president of the American Small Business League. The Petaluma, Calif., organization formed in 2002 in response to what Chapman said were loopholes that allowed large companies to obtain government contracts that should have gone to small businesses.

''I think the Bush administration will try to close the SBA this year," Chapman said. ''I base that not just on the reports I've read, but on what people in the SBA and the Bush administration have privately told me ... One government lawyer said Bush will starve the SBA to death. Another said he wants to roll it into the Commerce Department."

Closing the SBA is a ''fantasy," said Mike Stamler, an agency spokesman. A local think tank that recently published a report calling for the SBA's abolition regularly puts out such reports, he said.

''They're entitled to their opinion," said Raul Cisneros, another SBA spokesman. ''But we're here today. We have a budget for next year."

In some ways, the SBA has been doing more with less money – its general budget this fiscal year is $456.5 million, down from $900 million in 2001, according to the U.S. Office of Management and Budget. But supplemental money added to provide disaster assistance in the areas hit by hurricanes raise this fiscal year's total to $987 million, Cisneros said.

However, a recent news release reported that the SBA backed about 98,000 loans worth $18.9 billion for small companies in fiscal 2005 through the agency's 7(a) and 504 loan programs, more than double the number in 2000. Another statement said small companies won a record $69.2 billion in federal contracts in fiscal 2004, including $8.4 billion in contracts garnered by companies participating in the SBA's 8(a) business development program.

''We're very pleased with the results our two main loan programs showed," SBA Administrator Hector V. Barreto said in a statement. ''In fiscal year 2004, it cost $100 million in government dollars to operate the 7(a) program. In fiscal year 2005, modest fees paid by the lenders and borrowers have allowed us to meet the extraordinary demand for these loans and dollars without taxpayer expense."

Attempts to abolishSBA not new

There have already been attempts by mostly Republican politicians to close down the SBA, which was created under Republican Dwight D. Eisenhower. In his 1986 budget proposal, President Reagan recommended abolishing the agency and moving what was left of its functions to the Commerce Department.

In the mid-1990s, Rep. David Dreier, R-Calif., who is still in Congress and chairs the House Committee on Rules, introduced a bill to terminate the SBA and roll it into the Treasury Department.

The SBA is not a part of any Cabinet-level department.

In a December study published by the Washington, D.C., think tank American Enterprise Institute, research fellow Véronique du Rugy advocated ending all ''subsidies" for small businesses. She called the ''great majority" of SBA programs ''wasteful and unnecessary."

''Market economies generate faster growth because resources are allocated on the basis of profit-maximization rather than political considerations," du Rugy wrote. ''Instead of preferential policies, policymakers should establish a tax and policy environment that encourages small, mid-sized firms with strong growth potential to evolve into successful large enterprises. And they should establish an environment where firms of all size could thrive. This means low tax rates, low levels of regulation, and a stable legal structure that protects property rights."

In a December interview in Business Week magazine, du Rugy also advocated abolishing the SBA, saying it ''hinders economic growth" and lends money to ''non-creditworthy firms."

American Enterprise papers such as du Rugy's carry weight with many in the Bush administration and in Congress, Chapman said.

While the SBA programs could use some fine-tuning, it doesn't make sense to abolish the agency entirely, or slice its budget in half, Little said.

''The SBA budget should be increased, not decreased," he said. ''The SBA has helped my company attract many contracts and grow. We've grown to 100 employees in nine years after starting with only two employees."

Closing the SBA would be a huge disservice, said Payal Tak, president and CEO of Telesis Corp., a Rockville information technology company and government contractor that ranked 28th last year on Inc. magazine's list of the fastest growing businesses, with 2004 revenue of $14.7 million. Last year, Tak was named the SBA's Business Person of the Year for the Washington, D.C., region and the company is in the SBA's 8(a) program.

''Small businesses are creating more jobs than large businesses," Tak said. ''The agency is doing an outstanding job."

The SBA is "the key tool" for small companies that want to work with the federal government, said Kimberly Scott, founder and CEO of The Great Gourmet of Federalsburg, which was recognized by the SBA last year as Small Business Exporter of the Year in Maryland.

"Every small business that contacts us for advice, we always send straight to [the SBA's Internet site]. It is a very easy portal to work within, and the information is invaluable," Scott said. "Without them, we would be lost in a maze of big business."

Small businesses employ about half of the private workforce and account for more than half of the net new jobs, according to the SBA.

There is no question the SBA needs to do a better job in areas such as ensuring contracts go to small companies, Chapman said. Studies by the federal Government Accountability Office and the SBA's Office of Inspector General have found that large companies have won contracts that should have gone to small businesses.

Other reportsraise concerns

A recent report by the U.S. Civil Rights Commission that called for the SBA to consider ''race-neutral alternatives" in procurement programs also concerns some business people.

''If you have always played on a level playing field, then that argument has some validity," Little said. ''But there is still some appropriateness in having programs that facilitate some catch-up."

Late last year, the U.S. Women's Chamber of Commerce in Washington won a court ruling that forces the SBA to implement the federal women's procurement program. The program has been delayed for about five years, chamber CEO Margot Dorfman said in a statement.

''The SBA was established to assist small-business owners," Dorfman said. ''Instead, after five long years, they still require an additional six months to simply write the procedures necessary to implement this program."

Washington business publisher Kiplinger also recently reported that President Bush plans to call for additional cuts to the SBA's budget, likely slicing the MicroLoan and Small Business Innovation Research programs, in his fiscal 2007 proposal due out later this month.

In a recent remarks on the Gulf Coast, Bush referred to the SBA as a ''small agency" that was ''overwhelmed" by Hurricane Katrina.