GAO Report says More Needed to Fix Failed Bush Policies

WASHINGTON - A Government Accountability Office (GAO) report issued today and requested by Senator John Kerry, Chairman of the Committee on Small Business and Entrepreneurship, shows that while the Small Business Administration (SBA) has made progress, years of underfunding and failed policies have taken its toll. President Bush’s policies have undermined lender oversight, left state offices without staff or funding to adequately serve small businesses, marginalized union representatives, and led to the lowest employee morale ratings of 30 agencies.

“As our nation struggles under a worsening economy, America’s small businesses keep the country employed and competitive in the global market. Instead of boosting resources for small firms, this Administration’s steep budget cuts have undermined the work of the Small Business Administration,” said Kerry. “This new report confirms what I’ve suspected all along, that the Administration’s boast that they were ‘doing more with less’ was not true. Too many vital programs have been cut too deeply, worker protections and rights were trampled, Katrina disaster victims got neglected and worse, and now, when we need it most, lending is down as much as 50 percent.”

The Bush administration used this final year in office to put forth a budget that would cut the SBA’s funding by nearly 30 percent from when they took office, the deepest cut experienced by any federal agency. As a result of consistent underfunding, the SBA’s workforce has declined by about 26 percent since 2000. Workers now say they’re having trouble meeting goals and carrying out the mission of their agency because they’re understaffed.

While GAO credited the SBA for efforts to improve training, transparency and communication, the report noted that state employees have less time and resources for business development activities because they must take on more duties as staff sizes decrease. This has contributed to low morale. Reflecting the need for more changes, the SBA placed last in a 2007 “Best Places to Work” list of federal agencies. Additionally, just when progress was being made, the Administration changed SBA’s leadership. Once again, this timing and judgment was poor.

“The SBA’s performance and morale have suffered because of a White House that continues to make this agency, and small businesses in general, a low priority,” said Kerry. “A Democratic administration would beef up small business programs and stimulate the growth of small firms to give our economy the jumpstart it needs.”

Download the Report: GAO Report on the SBA

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