By Nicole Duran

Hector V. Barreto Jr., President Bush's nominee to head the Small Business Administration, owes the House one.

By passing legislation late Wednesday that would restore the SBA funding that the President had proposed to slash, House lawmakers took the first step toward calming anxious bankers who would have had to pay higher fees to the government or charge small businesses more for SBA-backed loans.

They also made Mr. Barreto's confirmation hearing Thursday before the Senate Small Business Committee much smoother.

"The administration's proposal was simply unacceptable," Chairman John Kerry, D-Mass., said about the White House plan to reduce the agency's appropriation in fiscal year 2002 by more than a third from this year, to $542 million.

Enter the House, which passed a bill to budget $745 million for the SBA -- or $203 million more than the President requested.

"I'm not asking you to go in and bite the hand that feeds you, but I am going to ask you to guide that hand," said the senator, hinting that he expects Mr. Barreto to be an advocate for his agency during next year's budget process.

Though he did not say he believed the President would inadequately fund the agency, Mr. Barreto said the numbers game is part of the balance the government must make between providing services and being fiscally responsible.

"Some of that money has already been restored," he said, sidestepping the direct question. "There's a starting point and where you end up, and we're in that process right now."

Whether he will get a chance Monday to start biting the hand of his would-be boss, or of the committee that confirmed his nomination, is now up to the full Senate, which is expected to confirm him today.

Meanwhile, a Senate Appropriations subcommittee was deciding how much to dole out for the SBA Thursday afternoon, and it was not clear whether the senators would be as generous as the House.

By approving the $745 million, the House also at least temporarily defused the contentious issue of raising fees on borrowers and lenders to sustain the agency's popular 7(a) program.

"The 7(a) program really is the flagship program of the SBA," Mr. Barreto said. "I share support of these programs and will work very closely with the committee to make sure the programs are run as efficiently and effectively as possible."

Acknowledging bankers opposition to any fee increases, Mr. Barreto said that he "wants to work very closely with our banking partners" on programs that enhance small businesses.

Mr. Barreto said that the President's plan would not increase fees on loans of $150,000 or less.

"Those getting loans under $150,000 are the businesses that really need the money, and they are not subject to the fee increase," he said. "I know the President is very supportive of small businesses."

Mr. Barreto, the son of Mexican immigrant restaurant owners, told the Senate committee that he would work diligently to help other families pursue their dreams.

"I have always lived the benefit of small business on a personal level," he said. "It has empowered my family to achieve the American dream."

Mr. Barreto, 39, worked in his family's restaurant and watched his parents build their business and become prominent members of the Latino community -- his father, Hector Barreto Sr., started the U.S. Hispanic Chamber of Commerce.

During his confirmation hearing, the younger Mr. Barreto pledged to continue serving Latino and other minority business owners. "You can see that small business and service to the community are a family tradition."

Looking at the hearing room filled with women and Latinos, Sen. Kerry reminded Mr. Barreto that those who championed his nomination would be most hurt if appropriators cut micro loans or other programs aimed at helping minority- and women-owned businesses.

"I hope you remember the tremendous responsibility placed on you" in exchange for their support, Sen. Kerry said.