BW Online | March 15, 2001 | Coming Soon, the Smaller Business Administration President Bush's proposed budget would slash outlays to the Small Business Administration by a huge 40% -- and a good chunk of the shortfall will be borne by the SBA's clientele: small companies in need of loans. Under the Administration's plan, the SBA would get approximately $539 million next year, down from this year's $899 million. But the agency doesn't sound terribly concerned. "There are substantial savings to be found in the SBA's programs that allow us to operate with a lower appropriation, but at the same level," of services as last year, says SBA spokesman Mike Stamler. "We're on board." Why so sanguine? Some cost savings -- about $74 million worth -- can be found by eliminating programs that have been declared redundant. These include the New Markets Venture Capital Initiative, which was designed to help bring venture capital to small companies in low-income areas; BusinessLINC, a mentoring program that aims to bring together small and large companies; and Prime, a technical-assistance program for disadvantaged entrepreneurs. The big money to compensate for the budget shortfall -- $235 million -- will come from fee hikes. The 7(a) loan program will collect an additional $114.7 million by raising the guarantee fee paid by borrowers by half a percentage point on loans over $150,000. On loans for amounts between $150,000 and $700,000, borrowers will now pay a 3.5% guarantee fee, up from 3%. For larger loans, the fee goes to 4% from 3.5%. http://www.businessweek.com/smallbiz/content/mar2001/sb20010315_323.htm

Bush's Budget Would Cut 3 Programs to Aid Children President Bush intends next month to propose cuts in programs to provide child care, to prevent child abuse and to train doctors at children's hospitals, administration officials said today. State officials contend that stable child care for low-income families has been a major ingredient of successful programs to move people from welfare to work. Congress provided $2 billion last year for the Child Care and Development Block Grant. That included an increase of $817 million, or 69 percent, so that states could provide day care to 241,000 additional children. Budget documents from the Department of Health and Human Services show that Mr. Bush plans to cut child care grants by $200 million, to $1.8 billion, as part of the budget he will send Congress early next month. The documents also show that spending for programs dealing with child abuse would be reduced by $15.7 million, or 18 percent. That would leave $71.8 million for federal grants to the states to prevent and investigate child abuse and neglect. http://www.nytimes.com/2001/03/23/politics/23SPEN.html?pagewanted=all

News Analysis: Bush Faces Quandaries of Economy and Energy Under the proposal he sent to Congress just a few weeks ago, there was no tax cut for the current year at all, a fact that seemed to undercut the president's repeated claim that the combination of the Fed's rate cuts and his own tax plan would pull the country out of what appears to be a cyclical downturn. Even the cut passed by the House earlier this month � and heartily endorsed by the White House � provides only $5.6 billion in tax relief this year. In a $10 trillion economy, that is, in the words of Robert Litan, an economist at the Brookings Institution, "something so tiny that you won't even notice it." On that point, Democrats and Republicans seem to agree. But each side is using that fact to bolster the case for substantial change in Mr. Bush's plan. http://www.nytimes.com/2001/03/21/politics/21ASSE.html?pagewanted=all

Washington Memo: For Bush, a Chronicle of Bad News Foretold Normally, presidents are cheerleaders for the nation's economy. On Oct. 19, 1987, the day the Dow Jones industrial average dropped 508 points, or 22.6 percent, President Ronald Reagan said the historic fall was simply investors taking profits. The next day, he blamed Democrats in Congress. The day after that, Mr. Reagan proclaimed that the crisis "appears to be over." In 1991, when the economy was last in a recession, President George Bush told Congress in his State of the Union address that there were "reasons to be optimistic about our economy." He predicted, accurately, that "we will get on our way to a new record of expansion and achieve the competitive strength that will carry us into the next American century." For President Bill Clinton, touting the economy posed no problem, since he presided over a period of unremittingly good economic news. Now comes George W. Bush, who is presenting what an analysis in The Financial Times last week called "the novel spectacle" of a president "urging citizens to ignore good economic news and focus on the bad." http://www.nytimes.com/2001/03/19/politics/19MEMO.html?pagewanted=all