News Column

Thumbs Up

July/August 2002, HISPANIC BUSINESS Magazine

By Patricia Guadalupe

Hector Barreto is getting high marks for his first year as administrator of the U.S. Small Business Administration (SBA).

“The administrator, from my perspective, gets an A for what he has been able to do,” says Congressional Hispanic Caucus chairman Silvestre Reyes (D-TX). “He has done everything he possibly can by way of outreach [to Hispanic-owned businesses], and is doing everything he can to work with us [in Congress].”

Adds Rep. Nydia Velázquez (D-NY), ranking member of the House Small Business Committee, “He’s very responsive and he understands the issues very well. I have a very good working relationship with him.”

But the legislators have a caveat: While Mr. Barreto is doing very well, the Bush administration is not, they say.

“When it comes to small business, the administration gets a D minus,” says Mr. Reyes, “because the draconian cuts that President Bush made in the Small Business Administration are unconscionable.”

Ms. Velázquez says that the Bush administration seems to care more about big business than small business, and that administration officials, including the president, need to better understand the role that small businesses play in the economy.

Says entrepreneur-turned-congressman Ruben Hinojosa (D-TX), “We’ve had some concerns there. The administration has pitted one group against another – the 8(a) programs against HUBZone programs. … We need both. We seem to be going backward instead of forward. We need to refocus our attention on small businesses, because 80 percent of our jobs come from small businesses.”

Mr. Barreto counters that the programs are not being pitted against one another. “Nothing could be further from the truth,” he says. “They are very different programs and both good programs. We’re committed to both of them.”

He also insists that President Bush is committed to small businesses. “The president doesn’t talk about it a lot because he would rather his actions speak over words.”

Mr. Barreto says the SBA has had a very successful year assisting small businesses. Since September 11, for instance, the agency has provided more than $800 million in Economic Injury Disaster Loans to firms affected by the attacks. The response to the program has been overwhelming, and the SBA recently extended the participation deadline.

Mr. Barreto and his team also have sought to make the SBA more user-friendly on the Web. The agency’s site ( averages 1.5 million visitors a week, and it recently introduced to provide small businesses with information on laws and regulations.

Nonetheless, some legislators point out that the administration has made cuts to key programs benefiting the minority business community, including the New Markets Initiative, a program that helps provide venture capital in traditionally underutilized communities. The program was cut from the budget, to fierce criticism from legislators Reyes and Velázquez and other advocates of small business.

But Mr. Barreto says the initiative is under review, and he points out that the president has proposed an overall budget increase of 4 percent for the agency even with belt-tightening elsewhere.

Despite their concerns, legislators remain hopeful.

“The SBA has done a good job in encouraging the formation and the success of small businesses,” says House Minority Leader Richard Gephardt (D-MO). “We could always, of course, do more. I think more and more people are looking to small businesses as the job creator in our society and economy, and we need to encourage the start-up of small businesses.”

Rep. Ed Pastor (D-AZ) is optimistic about the future for the relationship between the small-business community and the SBA.

“I think the current administrator knows the programs that work. I know we in Congress are going to be able to work with him,” he says. “He was a small-business man. He understands the value of programs like 8(a).”


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