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Democrats Charge Bush Short-Changing SBA, Others

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Feb. 21, 2005 -- Democrats are making small business a point of contention in their battle against the Republican White House.

In a report released Wednesday, House and Senate Democrats said that the president's budget disproportionately cuts small business programs.

According to the report, 50 out of the 100 programs that assist small businesses are either going to be severely cut or eliminated next year. The Small Business Administration is to be the most affected among all government agencies with small business initiatives when the axe falls, as14 programs are to be trimmed, in the case of the Small Business Development Centers; unfounded, like the 7(a) loan program; or cut, like its microloan program.

Among all government agencies, the small business programs within both the Department of Agriculture and the Housing and Urban Development will also fair poorly, with 12 program cuts to the first and 8 to the latter, planned.

"The administration's FY 2006 budget request--for a third year in a row--calls for near-record deficits, and provides a fiscal plan based on flawed social security and tax initiatives, which will be far from putting our nation's economy on the right track. And worst of all is what this budget does to small businesses and entrepreneurs," said Nydia Velazquez, the Ranking Democrat of the House Small Business Committee.

Senator John F. Kerry, a member of the Committee on Small Business and Entrepreneurship, also railed into the president's budget plans at a senate hearing on Thursday. "Over the last four years, President Bush has cut the SBA's budget by more than one-third, leaving our entrepreneurs struggling for access to credit, federal contracts and adequate training," Kerry said.

In 2006, the SBA is slated for $593 million, only 3% less than 2005, but a 13% decrease from what the president proposed for 2005, a sign that Congress didn't approve all of last year's cuts. Since 2001, the SBA's budget has been cut 34%.

A spokesperson for the SBA played down the cuts, noting the amount of 7(a) loans, for one, rose 28% through the second week of February, as compared to the same period last year. Loans for women and minorities are up as well.

Mr. Cisneros also noted that $115 million of the 2001 budget was for subsidizing the 7(a) loan program, which is now self-supporting thanks to a fee hike.

"These are tight times, but we've demonstrated that we can do it," Mr. Cisneros said.

For his part, the president has said that he will make other moves to support small businesses. In the budget summary prepared by the White House, the president said these plans include cutting taxes and making health care more affordable and noted that according to the White House's Office of Management and Budget, 25 million small businesses and their owners saved more than $3,000 in lower taxes last year.

Last updated: Feb 21, 2005




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