Obama Pushes Agency Consolidation
The Small Business Administration would no longer be a separate entity and its functions would be incorporated into an agency that combines the functions of six agencies that deal with trade and business matters, according to a proposal made by President Obama.
He said at a Jan. 13 White House event attended by small business executives that he will ask Congress for specific authority to make merger proposals, which presidents have had to ask Congress for permission to make since 1984. If he receives permission, he will ask lawmakers for an up-or-down vote on this proposal within 90 days.
“No business or nonprofit leader would allow this kind of duplication or unnecessary complexity in their operations,” he said. “You wouldn’t do it when you’re thinking about your businesses, so why is it O.K. for our government? It’s not.”
The new agency would incorporate the functions of the Small Business Administration, the Office of the United States Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation and the Trade and Development Agency.
Obama also announced that he was elevating the position of SBA administrator to a cabinet-level position.
Neither CUNA nor NAFCU had a comment on the merits of the proposal, but CUNA Senior Vice President Ryan Donovan said he’s not sure whether there are votes to pass it.
“I’m not sure where he gets the votes. The Republicans who might be inclined to support it might not want to give him a win on this in an election year. Democrats might also be reluctant to alter the status quo in an election year,” he said.
Five credit union executives, whose institutions make small business loans, said they didn’t know enough about the proposal to have a position on it.
At an October hearing of the House Small Business Committee, Corning FCU President/CEO Gary Grinnell said as currently structured, the SBA takes too long to make decisions on loan applications, especially for credit unions that aren’t preferred lenders. Grinnell, whose Corning, N.Y.-based credit union has assets of $896 million, also said that credit unions are disadvantaged because the SBA doesn’t compare the default rate of loans made by credit unions with financial institutions that have similar loan portfolios.
Administration officials estimate the proposal could save $3 billion over 10 years.
As Obama faces what is expected to be a difficult re-election race, he will be reaching out for the support of independent voters. According to several polls, many of those voters support efforts to streamline and make government more efficient.
“With or without Congress, I’m going to keep at it, but it would be a lot easier if Congress helped,” he said. “This is an area that should receive bipartisan support, because making our government more responsive and strategic and leaner, it shouldn’t be a partisan issue.”