PETALUMA, Calif., February 15, 2006 /PRNewswire/ -- In a recent speech in the Gulf Coast, President Bush described the Small Business Administration as a "small agency" that had been "overwhelmed" by the disastrous hurricanes in the region. What he failed to mention in the address was that the SBA is small because he made it that way. In fact, Bush has cut the agency's operating budget for six consecutive years--more than any other agency. The President didn't even include disaster loan funding in his 2006 budget. Between the budget cuts and the staff reductions, the SBA has been rendered incapable of effectively managing any of its prime functions, including disasters.

Prior to the hurricanes and for cost-saving purposes, the SBA was in the process of re-organizing its Office of Disaster Assistance and centralizing all loan processing in Fort Worth. Unfortunately, the office had not even reached "start-up capacity" by the time Katrina hit. Coupled with the fact that the SBA had already lost or laid off experienced loan processors,
the agency had no alternative but to hire thousands of temporary employees to handle the workload.

Just last week, the SBA declared that it would be out of money by February 13th if it did not receive more funding from Congress. "Time and time again, the Bush Administration has not requested enough funding for small business or disaster loan assistance, leaving Congress to bail them out," stated Senator John Kerry, Ranking Member on the Senate Committee on Small Business and Entrepreneurship. In an extensive letter to the President, Kerry urged Bush to fully fund the SBA's disaster loan program.

With an estimated 400,000 jobs lost and 200,000 small businesses affected by Hurricane Katrina, Gulf Coast residents have to wonder if the current administration cares about them at all. Six months after the hurricane, 50% of homeowners and 35% of business owners are still waiting for their loan applications to be processed. "We are in limbo and on hold," stated Mayor C. Ray Nagin of New Orleans.

"SBA Administrator Hector Barreto has repeatedly declined additional funds and staffing from Congress claiming he could do more with less," stated Lloyd Chapman, President of the American Small Business League. "Barreto's incompetence has resulted in thousands of people waiting months for disaster assistance and thousands of businesses being forced into bankruptcy because the SBA has been financially decimated. Where is the compassion in this? It's totally unacceptable."

Gulf residents aren't the only ones who have been adversely affected by cuts to the agency's budget. After its regional offices were reorganized in 2005, SBA employee morale ranked dead last in a study of 30 Federal agencies and departments.

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 1953. 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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