SBA blasts Obama transition leader

00_questionmarkThe Small Business Administration blasted President-elect Barack Obama’s SBA transition team leader for writing a “largely inaccurate, outdated and misleading” analysis of the agency’s record during the Bush administration.

Fred Hochberg, an SBA deputy administrator during the Clinton administration, analyzed the agency in a chapter submitted for Change for America, a compilation of advice for the new administration published by the Center for American Progress Action Fund and the New Democracy Project.

Hochberg recommended the agency be granted Cabinet-level status, as it enjoyed during the Clinton years, so small businesses would have a voice in overall economic policy. He also contended the SBA “was decimated by budget cuts during the Bush administration.” The agency “lost its vision and energy,” he wrote.

He went on to criticize the decision to end federal subsidies for the SBA’s 7(a) loan program; failures to ensure small businesses win their share of federal contracts; and the agency’s poor performance in getting disaster loans to victims of Hurricane Katrina.

The SBA’s press office responded Dec. 11 with a three-page “news release/fact sheet” that refuted Hochberg point-by-point. The agency’s budget hasn’t shrunk, it contended, if one excludes congressional earmarks; disaster loan funds, which vary year-to-year; and the $120 million that formerly subsidized 7(a) loans. That loan program is now self-supporting through fees on borrowers and lenders – fees that Hochberg contends are too high.

SBA lending was down in fiscal 2008, the fact sheet conceded, but the agency still approved 30 percent more loans than it did during the Clinton administration’s best year.

The SBA also has taken steps to hold agencies accountable for meeting their small-business contracting goals and has “completely rebuilt” its disaster loan program, the fact sheet noted.

The news release ends by saying the “SBA will continue to welcome Mr. Hochberg as a member of the president-elect’s transition team and looks forward to working productively with him and his colleagues.” But, it added, Hochberg’s analysis “does not advance the cause of informed debate on the future of the agency.”

1 comment
  1. Hank Wilfong said:

    Our ISSUE STATEMENT NO. 3930: LET’S TALK ABOUT PROMOTING THE COMPETITIVE VIABILITY OF SDBs…, speaks, somewhat, to the “SBA responses” to the Obama Transition Team report on the current status of SBA. And, it’ll talk somewhat to the reasons for SBA being in the sorry state it is in right now.

    There’s really no legitimate reason for the status, and the way SBA got into it’s tremendously deteriorated condition. Those whose watch this is, should have been up in arms about the woeful neglect over the last several years.

    In the Issuance above, we talk about how, back in the early 80s, we served as the Associate Administrator for Minority Small Business/Capital Ownership Development under Ronald Reagan. Back then, we believed in and practiced “developing and growing firms” and promoting the viability of firms owned by socially and economically disadvantaged individuals through the provision of contractual financial and technical assistance as may be necessary”. Back then, SDBs were synonymous with Minority Small Business (MSB).

    Somehow, since that time, it has seemed to become politically incorrect to refer to “Minority” when you’re talking about assisting small businesses. Somehow, since that time, it has become more acceptable/ desirable to talk in euphemistic terms like “disadvantaged” or other non-ethic terms-you know “race -neutral” stuff.

    Much of what happened to SBA in general, can be explained in watching the “name change” of MSB/COD. Under the radar, things were changed, jobs were not done, responsibilities no discharged. All the while, folk kept getting paid, for doing what?

    So, now, what are we gonna do about it? We need to get over the name thing, and get back to the nitty gritty. You can’t fight racism and the effects of racism, with non-racial methods. And, you can’t fight gender discrimination, with non-gender methods. So, if we are to face and correct these issues, of racial and gender discrimination and their effects, then we need to accept that reality. If there is no racial or gender discrimination, then we can feel free to stand down. They no longer need us to stand on the wall.

    Having said that, let us re-state what we have said for a long time, back then, and today. Racial and gender discrimination is still alive and well in America. And, we still need to eradicate it. As we chip away at these two, we will serve to ameliorate the problems minority and women-owned businesses have today.

    A good start would be restoring the Office of Minority Small Business Ownership and Capital Ownership Development at the United Small Business Administration. We hope to make these small businesses in the minority and women sector competitively viable, and we’ve solved a lot of the “Economic Crisis” and “Mortgage Crisis” in the small business community, in general.

    We hope Change will bring with it a new attitude about what is “politically correct”. We hope that Change will bring about a new conviction to “putting your money where your mouth is”. We hope that the new Administration will have the nerve to do what it KNOWS is right, and not what is politically acceptable.

    And, we hope SBA folk will stop trying to defend the indefensible…

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