WASHINGTON -- The new head of the Small Business Administration told bankers on Monday that cutting government red tape for both lenders and small-business owners is among his top priorities.

Speaking at an American Bankers Association conference on small-business lending, Erskine B. Bowles criticized unnecessary government intervention in the private sector, faulting it for drying up small-business credit.

Reining in Regulators

"Given the onerous demands of federal regulatory requirements, I don't think it is a stretch to see these demands as a primary contributor to the credit crunch we're working so hard to alleviate," he said.

He added, "The federal presence must be restored to the bounds of responsible activity, and that just isn't being done well enough now."

Mr. Bowles said President Clinton asked him to help free up more more investment capital for small firms by focusing on four goals:

* Removing unnecessary and costly federal regulations that restrict lending.

* Reducing paperwork and regulations that inhibit the growth and productivity of small firms.

* Becoming "the eyes and ears" of the small business community, including holding a series of town meetings around the country.

* Reorganizing the SBA to become more effective and responsive to both businesses and lenders.

Plans Defended

At the conference, Mr. Bowles also defended President Clinton's budget proposals for the SBA, citing deficit reduction as the reason for the changes. The President has proposed cutting government guarantees for SBA loans and charging a fee for participation in the agency's secondary market.

Mr. Bowles expressed hope that Congress would give the agency additional funding for its guaranteed loan program before money runs out this year.

The House has voted to give the SBA an additional $181 million this year, but the Senate has not voted on funding.

"We're pressing Congress for the funds needed to maintain this worthwhile initiative, and I aim confident that we'll get what we need," he said.

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