Ongoing budget problems have forced the Small Business Administration over the past year to eliminate funding for women's business centers, consolidate several regional offices, and even briefly shut down its flagship 7(a) lending program.
Now the problems appear to have produced another casualty.
Late last week the SBA put SBA Solutions, a 2-year-old electronic newsletter produced in conjunction with Staples Inc. and distributed monthly to approximately 38,000 subscribers, on an indefinite hiatus. The reason: Congress has delayed action on a reauthorization bill, which provides, among other things, the SBA's authority to enter into partnerships with private-sector companies like Staples.
Raul Cisneros, an associate administrator at the SBA, said Friday that he was hopeful the bill would be passed quickly and that SBA Solutions could resume publication, perhaps as soon as next month.
But other observers said the hiatus could be long.
Strictly speaking, the bill, which gives the SBA congressional permission to function for three years, is separate from its budget. But observers said the debate over the SBA's spending plan has grown so contentious that all of its other legislative business has ground to a halt.
At the crux of the issue is SBA Administrator Hector V. Barreto's proposal to replace the annual subsidy Congress provides to pay the credit costs of the agency's flagship 7(a) lending program with lender fees. That proposal has little support among lawmakers.
Last month the House voted 281 to 137 to junk Mr. Barreto's plan - which is incorporated into President Bush's fiscal 2005 budget - and reinstate the subsidy. The Senate is likely to do the same when it returns from its summer recess, said Tony Wilkinson, the president and chief executive officer of the National Association of Government Guaranteed Lenders.
Even so, Mr. Cisneros said the SBA was still backing Mr. Barreto's plan.
According to Mr. Wilkinson, who has lobbied hard to defeat Mr. Barreto's proposal, Bush administration officials are so fearful that lawmakers will attach riders reinstating the 7(a) credit subsidy to other bills dealing with the SBA, including the reauthorization bill, that they have opted to freeze all SBA-related legislation.
Money troubles have roiled the SBA throughout this year. Last month it was forced to cancel financial grants to more than 50 women's business centers when Congress failed to authorize any money for the program. Another initiative to cut expenses by consolidating several district offices angered a number of SBA staff members and led to the resignations of two district directors.
In January the SBA was forced to shut down the 7(a) program for a week when surging loan demand threatened to outstrip its funding authority.
SBA Solutions helped chronicle that success by publishing "success stories" of businesses that have grown with the help of SBA-backed loans, as well as advice, news, and information about SBA-sponsored workshops and events.
