You’re the Boss Blog: S.B.A. Budget Pits the Small Against the Less Small

The Agenda

How small-business issues are shaping politics and policy.

The Agenda has often recounted efforts at the Small Business Administration to shift attention to larger businesses, a particular interest of the outgoing administrator, Karen Mills. Now The Washington Post reports that a program that the Obama administration has proposed to provide counseling to midsize businesses would come at the expense of counseling programs for much smaller companies.

As part of its 2014 budget, the S.B.A. seeks $40 million for an “Emerging Leaders” initiative, which the agency describes in a budget document as “a training initiative that specifically focuses on executives of established businesses currently poised for growth from communities across the country.”

At the same time, the budget proposes cutting almost $10 million, or 9 percent of what it received in 2012, from the grants it offers to small-business development centers, and $480,000, or 7 percent, from the agency’s funds for Score. Several other counseling programs would undergo cuts as well; all told, cuts to the four leading small-business counseling organizations that the agency calls its core resource partners would total $11 million.

Ms. Mills has long insisted that the agency needed to expand its focus to larger small businesses, which she has said are often overlooked as a source of new jobs, and that it could do that, as she put it recently, “without ever taking our eye off the ball on Main Street.”

The 2014 budget, however, suggests that with this broader mission, something has to give. At a recent House Small Business Committee hearing, Ms. Mills testified that small-business development centers could still compete for this money. But according to C.E. Rowe, president of America’s SBDC, the association representing development centers, the money could be used only for the Emerging Leaders program and not to offset the administration’s proposed cuts.

Under those cuts, “you lose counselors,” Mr. Rowe, known as Tee, said. “And if you rehire them for this program, they can’t serve the general population. You can’t fudge under a federal grant.”

A representative for Score, Bridget Pollack, said, “Whenever Score’s mission matches with the Emerging Leaders education program, Score will certainly work with the S.B.A. to try to participate.”

Michael Chodos, the S.B.A.’s associate administrator for entrepreneurial development, said in a statement that development centers and other counseling groups already received funds earmarked for special purposes, including the sort of classroom instruction the new program hopes to build on.

“We’re still asking for over $120 million for core services across our resource partner network,” he said. “The $40 million represents additional resources to scale up existing training, which we know brings immediate growth and job creation.”

Still, even if the Emerging Leaders program does get money, it remains to be seen if it will come at the expense of the other counseling programs. The Obama administration has tried to reduce appropriations for Score and the development centers for several years, but each time, Congress has blocked those efforts.

Article source: http://boss.blogs.nytimes.com/2013/05/09/s-b-a-budget-pits-the-small-against-the-less-small/?partner=rss&emc=rss