Even as microenterprise development professionals lobbied for Microloan, a Congressional subcommittee was rubber-stamping the White House budget proposal that would eliminate it June 21, 2004 -- Last week, a host of microenterprise development professionals descended on Capitol Hill to urge lawmakers to reinstate the Microloan program, which has been slated for termination by the Bush Administration.

Organized by the Association for Enterprise Opportunity (AEO), the Microloan Advocacy Days turn out to be what might be called moderately successful. The event culminated with a Congressional reception that was attended by Senator Hillary Clinton (D-NY) and by House Small Business Committee Ranking Member Nydia Velazquez (D-NY).

Also in attendance were staff representatives of Senator Jeff Bingaman (D-NM) and Senate Small Business Committee Ranking Member (and presidential candidate) John Kerry (D-MA). The atmosphere of the event was as heavily laden with the passion of microenterprise proponents as with their frustration. A clearly furious Congresswoman Velazquez slammed the Bush Administration for hypocracy, contrasting "tax cuts for the wealthiest Americans" with this proposal to pull the plug on Microloan and PRIME. "So much for compassionate conservatism," she said with heavy sarcasm.

All the legislators and their representatives repeatedly encouraged participants to continue their lobbying efforts, to seek out receptive Republican moderates and avoid confining their efforts to their own Congressional representatives.

It is unclear whether any minds were actually changed during meetings with Congressmen, Senators and their staff. In terms of the President's budget proposal, the House still seems inclined to rubber-stamp the Administration's fiscal 2005 budget and the Senate still seems open to discussion. Last week, the Commerce-Justice-State Subcommittee of the House Appropriations Committee met to mark up draft legislation of the fiscal 2005 budgets under their jurisdiction, including the budget for the Small Business Administration. The resulting legislative proposal would cut the SBA budget even more than originally proposed. Instead of the requested $687.4 million requested for the agency, the SBA budget has been further trimmed to $672 million. That includes a zero dollar appropriation for the popular 7(a) loan program, a move that generated immediate protest from House Small Business Committee Chairman Don Manzullo (R-IL) and Ranking Member Velazquez, along with another 151 members of the House.

In a "Dear Colleague" letter to the Chairman and Ranking Member of the House Appropriations Committee, the group requested a funding appropriation for 7(a) that would support $12.5 billion in loans, noting the dire consequences of zeroing out the appropriation for the loan guaranty program. Without a subsidy, either the loan guaranty amount would be reduced (and the credit standards would be tightened to reduce lender risk) or the fees would be increased. Either result would leave many small businesses without access to capital.

The full Appropriations Committee is tentatively scheduled to take up the Commerce-Justice- State appropriations bill on Wednesday, and the outlook is less than sunny. The Committee held a hearing back in March to consider the budget proposal for the SBA, and the sole witness was Administrator Hector Barreto, whose job is to defend the way the President has proposed to slice his agency's budget to smithereens. Whether the Committee has been listening to the howls of anguish that have been coming from other segments of the small business community is unclear.

This proposal to cut the SBA budget by another 15% in fiscal 2005 (and the overall move to distinguish this agency by making it the federal agency with the largest budget cuts of any during the Bush Administration) is even more disturbing when placed in the larger context of apparent hostility toward it that seems to have grown bolder in recent years.

The agency will continue to exist and to function for as long as the Small Business Act is on the books and the agency has a budget. But some on Capitol Hill have acknowledged that the continued refusal of the House to take up the matter of re-authorization of the SBA is likely to ultimately undermine the agency.

The legislation that would re-authorize the SBA was unanimously passed out of the House Small Business Committee last year and the other House committees with jurisdiction over some of the provisions in the bill signed off on it in March, clearing the way for a vote. Staff members of the Small Business Committee have indicated that some provisions are now being renegotiated among members of that committee.

But other sources on Capitol Hill have voiced a suspicion that the delay comes from higher up in the House leadership. In fact, sources from both sides of the aisle have expressed concern that the stalling move is another indication that some House conservatives would like a chance to eliminate the Small Business Administration altogether. The Journal attempted to reach House Minority Leader Tom DeLay's office for comment but was unable to do so before deadline.