Statement of Administration Policy: H.R. 2166 - Small Business Program Authorizations

AS SENT TO HILL

(House)
(LaFalce (D) New York)

The administration opposes H.R. 2166 because it fails to adopt major reforms for Small Business Administration (SBA) programs proposed in the 1988 Budget, including:

— termination of direct business loans, except for Minority Enterprise Small Business Investment Company (MESBIC) loans;

— movement toward loan guarantee fees that will allow the program to become self-supporting;

— reduction of the contingency liability to reduce the percentage of the loan on which taxpayers are at risk in the event of a default; and

— termination of SBA's Pollution Control Guarantee Program which (1) has experienced a significantly reduced level of activity as a result of the decision to eliminate the tax exempt provisions associated with it, and (2) can more appropriately be delivered by State agencies.

The administration believes that these reforms will enable the Small Business Administration to continue to provide services to the Small Business community in a fiscally responsible manner. We look forward to working with the Congress to achieve this important objective.