WASHINGTON – Today Sen. John Kerry (D-Mass.) said the President's proposed budget cuts critical small business programs and falls short of repairing the deep cuts to the agency over the last seven years. Excluding disaster loan funding, the proposed budget for next year represents a 28 percent cut for the Small Business Administration (SBA) since President Bush took over in 2001 – the largest cut of all the federal agencies – and a three percent cut from 2008 appropriations. The President's request of $657 million, including disaster loan program funds, for the SBA is only .02 percent of the entire $3.1 trillion budget.

“Unfortunately, this budget is more of the same from the Bush Administration for America’s 27 million small businesses. The Bush budget fails to provide the critical investment to finance start ups and grow existing businesses. Last year, nearly 900,000 jobs were created or retained due to government-backed loans and venture capital deals to small businesses. But we’re already seeing these loans on the decline this year as a result of the mortgage crisis so we need to do everything we can to boost these programs. This is not the time to be making cuts,” said Kerry, Chairman of the Committee on Small Business and Entrepreneurship.

“The significant proposed cuts to business counseling programs will have a detrimental impact on our ability to help small businesses succeed. I will work with my colleagues in a bipartisan way to reverse the severe Bush Administration cuts as the Democratic-led Congress did last year when we restored $40 million to core small business programs,” Kerry said.

Once again, the Bush Administration proposes no funding for small business loan programs and deeply cuts counseling and outreach programs like Small Business Development Centers, Women's Business Centers, and technical assistance programs.

Specifically, the proposed 2009 budget: 


  • Lacks funding for loans and venture capital programs. The budget yet again provides no funding for the SBA’s largest loan programs – 7(a) and 504 – and provides no increase in the authority to back new loans. The President has recommended a program level for 7(a) loans of $17.5 billion and $7.5 billion for the 504 program—the same as his last two budget proposals. There is no money for the SBIC debenture program, and the President has recommended the same program level of $3 billion for the last six years. Last year, nearly 100,000 businesses received 7(a) loans, a $14 billion investment in the economy that created or retained over 624,000 jobs. Nearly 200,000 jobs were created or retained from the 504 loan program, which lent nearly 11,000 small businesses over $6 billion in loans. The SBIC program helped create or retain almost 63,000 jobs in 2007.
  • Eliminates all funding for the Microloan Program and Microloan Technical Assistance. This year’s proposed budget increases the program level for the microloan program from $21 million to $25 million but doesn’t fund it. It continues shifting the cost to the lenders. This is the second year in the row the president has made this proposal; for the previous three years in a row he sought to eliminate the SBA’s microloan program. Microloans proportionately help more women and minorities than other programs. The proposal also eliminates the counseling assistance program, Microloan Technical Assistance, which is essential to help microentrepreneurs succeed and repay their loans. Last year 2,437 small businesses received more than $31 million in microloans nationwide.
  • Eliminates low-income capital program. The President requested no new funding for the New Markets Venture Capital Program.
  • Cuts funding for key counseling programs. The President's budget proposal makes significant cuts to grants for Small Business Development Centers and Women's Business Centers, reducing their proposed budgets by $10 million and more than $1 million respectively. Over the last seven years, SBDCs and WBCs have essentially been flat-funded, which equals real cuts for these centers due to their funding level not keeping up with inflation. In addition, with the elimination of the Microloan Technical Assistance program, the President proposes SBDCs and WBCs would pick up the slack despite already reduced funding. Last year, SBDCs assisted 600,665 businesses and WBCs assisted 147,000 businesses. The Program for Investment in Micro-entrepreneurs which provides counseling to low-income entrepreneurs has also been eliminated.
  • Provides no new funding for Procurement Center Representatives. The proposed budget provides no new funding to hire additional PCRs. Currently there are about 57 PCRs -- although only around 30 have full-time PCR duties -- to monitor contract bundling and break out contracts for small firms. This falls far short of the 100 PCRs Congress has been calling for to oversee nearly $400 billion in federal contracts.
  • Cuts funding for critical assistance programs and eliminates line-item transparency. The President continues to propose cuts to funding for the 7(j), HUBZone and Native American Outreach programs as well as roll the funding into the overall agency operating budget. This reduces transparency and creates uncertainty as to how much funding the programs will receive.