Victor Godinez: Bush business nominee is off to a bumpy start

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Victor Godinez: Bush business nominee is off to a bumpy start

Pick to run SBA criticized for having big-company pedigree

Dallas Morning News
May 16, 2006

President Bush's nominee to take over the top spot at the Small Business Administration is doing his best to stay out of the spotlight.

But the spotlight seems to have found him anyway.

Steven Preston is Mr. Bush's pick to succeed Hector Barreto as head of the SBA.

Mr. Preston has turned down all interview requests since the nomination last month and is still waiting for his Senate confirmation hearing, but a lot of people have already made up their minds on his qualifications.

Mr. Preston was previously executive vice president at ServiceMaster Co., a home and lawn care services company that reported $3.2 billion in revenue last year.

Lloyd Chapman, president of the American Small Business League and one of the harshest critics of the SBA's performance in the last several years, said it doesn't make sense to appoint an executive of a multibillion-dollar company to head the SBA.

"Historically, the kind of people running the SBA were people who had a passion for small business and had a track record with that sort of thing," Mr. Chapman said. "Erskine Bowles was a great guy. Not Barreto and guys like this Preston guy."

Rep. Nydia Velázquez of New York, the senior Democrat on the House Small Business Committee, didn't go much easier on Mr. Preston.

"Small businesses need an independent voice at SBA that will fight for their needs, speak out forcefully on their behalf and act as a true champion for this nation's entrepreneurs," she said in a news release.

"Mr. Preston would be coming to the agency from a Fortune 500 company whose issues are nothing like those faced by the average small-business owner."

But Mr. Preston does have some allies.

Matthew Shay, president of the International Franchise Association, has thrown his support behind Mr. Preston, noting that ServiceMaster is a franchisor.

"Steve Preston knows the crucial role that franchised small businesses play in the global economy," Mr. Shay said in a news release.

"To have someone with this close-up view of free enterprise and entrepreneurship leading the Small Business Administration will be extremely beneficial to the growth and development of small firms."

The verbal jousting over Mr. Preston's appointment is part of a larger discussion.

Democrats and other critics have been complaining about budget cuts and slow response times at the organization almost since Mr. Bush took office.

Mr. Chapman has charged that for years Mr. Barreto and the SBA have turned a blind eye as large firms have commandeered federal contracts intended for small firms.

He also contends that Mr. Bush's ultimate goal is to shut down the SBA entirely, and remove the regulations that require a certain portion of federal contracts to go to small businesses.

Creating jobs

From 2002 to 2003, when the economy was just emerging from a recession, small companies were responsible for the vast majority of jobs created.

The Small Business Administration's Office of Advocacy recently released data showing that during that time, firms with fewer than 20 employees added a net of 1.6 million jobs.

Companies with between 20 and 499 employees created a net of 400,000 new jobs, while businesses with 500 or more workers lost a net of 1 million jobs.




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