WASHINGTON - Sen. John F. Kerry (D-Mass.), Ranking Member of the Senate Committee on Small Business and Entrepreneurship, today expressed deep concerns over President Bush's proposed fiscal year 2005 budget for the Small Business Administration's (SBA) microenterprise programs.
"This budget pulls the plug on the nation's smallest businesses. It clearly does not match the President's rhetoric of helping America's innovators succeed in business," Kerry said. "By eliminating these programs, the President is hurting those who are struggling in business the most - women, minorities and the poor. For most of these entrepreneurs the SBA is their only hope."
The President proposed cutting SBA's budget by $119.5 million over last year's request, a 15 percent decrease, while increasing overall spending by 4.1 percent. The cuts include:
- terminating the Microloan program;
- eliminating the Program for Investment in Microentrepreneurs (PRIME); and
- severely underfunding the Women's Business Centers (WBCs).
Shortchanging microentrepreneurs is nothing new to the Bush Administration. The Administration has proposed eliminating PRIME every year. The WBCs have been underfunded for three years, and this year are in jeopardy of losing 55 centers across the country if the Bush budget is enacted. And for the past two years, the Microloan program, as well its technical assistance component, have been slashed.
Both the Microloan and PRIME programs target underserved, low-income entrepreneurs, including those looking to get off welfare. In 2003, the Microloan program funded 2,400 loans, nearly half of which went to African-American and Latino businesses. By eliminating PRIME, 74 centers across the country that provide assistance to low- and very low-income microentrepreneurs will lose critical funding. The WBCs are an important resource for the 10 million women-owned businesses across the country. Last year alone, they counseled over 100,000 individuals. The International Labor Organization estimates that the return on investment in microenterprise programs - such as in the Microloan, PRIME and WBCs - ranges from $2.06 to $2.72 for every dollar invested.
The President's budget for fiscal year 2005 was released Monday. The Committee on Small Business and Entrepreneurship will hold a hearing to address concerns about the budget on Thursday, February 12, 2004 at 9:30 a.m. For more information, call (202) 224-8496.