WASHINGTON - Senator John F. Kerry (D-Mass.), Chairman of the Committee on Small Business and Entrepreneurship, joined his colleagues on the Budget Committee to send a letter today to Mitchell Daniels, Director of the Office of Management and Budget, to express his continued concern about the overestimation of the cost of the Small Business Administration's two largest loan programs 7(a) and 504 under the Federal Credit Reform Act.
"This problem has dragged on far too long and it must be corrected now," wrote Senator John Kerry. "This administration has rejected six suggestions to correct this problem with bureaucratic excuses filled with technical jargon that are costing small businesses and small business lenders hundreds of millions of dollars. These excessive fees by an Administration that claims to care about small businesses are tantamount to a tax on small businesses -- and I want the Administration to reverse course and join us in addressing the problem."
The key causes of the over calculation lie in that the Administration's use of the most conservative loan default rate to calculate the program's cost and its failure to adequately and accurately include program changes, statutory and regulatory, that have reduced default rates and improved program performance.
Senators Kerry, and his colleagues Kent Conrad, Pete Domenici and Kit Bond have requested a response by June1, 2002 and inclusion of the adjusted costs in the FY 2003 budget and appropriations process.
"This problem has dragged on far too long and it must be corrected now," wrote Senator John Kerry. "This administration has rejected six suggestions to correct this problem with bureaucratic excuses filled with technical jargon that are costing small businesses and small business lenders hundreds of millions of dollars. These excessive fees by an Administration that claims to care about small businesses are tantamount to a tax on small businesses -- and I want the Administration to reverse course and join us in addressing the problem."
The key causes of the over calculation lie in that the Administration's use of the most conservative loan default rate to calculate the program's cost and its failure to adequately and accurately include program changes, statutory and regulatory, that have reduced default rates and improved program performance.
Senators Kerry, and his colleagues Kent Conrad, Pete Domenici and Kit Bond have requested a response by June1, 2002 and inclusion of the adjusted costs in the FY 2003 budget and appropriations process.
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