Partisan Divide in D.C.? Not Over the S.B.A.

The New York Times
June 15, 2012


In this election season, the leitmotif to the story taking shape in Washington is that the partisan divide is vast and growing vaster — if last year it was difficult to pass bills that were once routine, now it has become impossible. But there appears to be at least one exception to the emerging rule: the Small Business Administration. Last week, the Republican-led House Appropriations Committee unveiled its bill (pdf) to finance the S.B.A. and several other government agencies, and what is most notable about the four pages dealing with the S.B.A. is the prospect for comity, not conflict.

In all, House Republicans have proposed appropriating $1.16 billion to the S.B.A. — $989 million when disaster funding is excluded — about $40 million more than the Obama administration has sought and $237 million more than the agency received this year. In its broad outlines, the funding proposal from the House is remarkably similar to the administration’s request. The main difference is that the House finances subsidies that would permit the S.B.A. to guarantee more lending in its main loan programs than the administration would. The increase may not have a meaningful impact on lending, though, since these figures are ceilings, and it’s not clear that lending will reach them. (If the first eight months of the 2012 fiscal year are indicative, the agency won’t come close to bumping up against the 2013 ceilings.) More meaningfully, the House would direct $112.5 million to small business development centers, as much as the centers received last year and $11.5 million more than the administration requested.

All of this is quite a turnabout from a few years ago, when the Bush administration struck many observers as indifferent at best to the S.B.A. and the Republican-led Congress was parsimonious in funding it. Perhaps most strikingly, House Republicans have agreed to support the S.B.A.’s microloan program at the same level the Democratic administration requested — whereas the Bush White House sought to eliminate microlending altogether. However, as we reported when the White House made its request public back in February, the proposal is less than the program received in 2011 or 2012. Indeed, while the S.B.A. would technically get more money under the budgets proposed by the White House and the House, most of that increase goes to subsidizing loan-making, which has become more expensive in recent years as the amount of risk has increased.

On Thursday, the Senate Appropriations Committee produced its own bill financing the S.B.A. (among other agencies) and largely followed the same template, proposing $1.12 billion. That is less than the House bill, but it directs more money to microlending and to the counseling programs than either the House proposes or the administration wants. At the same time, it pares back the House’s loan subsidy (and corresponding lending limits) to the administration’s request.

Elsewhere in its bill, the House is not nearly as conciliatory toward the Obama administration and the Senate. For example, it denied the White House additional money for the Internal Revenue Service to carry out provisions of the Affordable Care Act, and it would prohibit the administration from transferring money to the I.R.S. for that purpose. This could conceivably make it harder for the I.R.S. to process the health care tax credit for small businesses. But an aide to the House Appropriations Committee said that the bill does not prevent the agency from using the money appropriated to it to carry out the health care overhaul. “The I.R.S. would not be prohibited from implementing the tax credit,” the aide said. The agency would have to choose its priorities from an expanded portfolio of responsibilities.

The Senate bill provides the I.R.S. with about $700 million more than the House bill does.

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