Proposed SBA Budget Inadequate, Democrats Say President Bush’s 2007 budget proposal would provide $624 million for the Small Business Administration, 5% higher than his request a year ago, but Democrats in Congress said all of the increase would go to disaster loans while cutting funding for many programs. SBA’s budget has shrunk by 38% since the Bush administration took office and its workforce has been cut by 24%. But the administration argues that the agency has improved service and made record numbers of government-backed loans. “SBA is administering its programs more efficiently to improve customer service and reduce program costs,” the president’s budget message said. SBA said the budget would support a record $17.5 billion in lending under the flagship 7(a) program, up from $16.5 billion in the current year. However, it would impose higher fees on loans of more than $1 million. The administration has largely succeeded in reshaping the loan program by emphasizing smaller loans and making the program self-sustaining. Despite increased fees on borrowers and lenders, SBA said the number of loans has more than doubled since 2001 while the average size decreased from $232,000 to $160,000 in 2005. “SBA seeks to target assistance more effectively to credit-worthy borrowers who would not get loans from the commercial markets in the absence of a Government guarantee,” the president’s budget message said. “SBA is actively encouraging financial institutions to increase lending to start-up firms, low-income entrepreneurs, and borrowers in search of financing below $150,000.” The budget would reduce grants to small business development centers and women’s business centers. The leading Democrats on Congress’s small business committees, Sen. John Kerry (MA) and Rep. Nydia Velazquez (NY), both denounced the budget proposal as inadequate.