I know the Small Business Administration isn’t exactly the sexiest agency in the government, but this is the quintessential example of how the Bush administration tries, and fails, to operate as a functional branch of government.
The federal government’s biggest program to help people rebuild after natural disasters is on the verge of running out of operating money because of budgeting problems at the agency that runs it, the Small Business Administration.
If Congress does not intervene in the next month or so to cover the administrative costs of the program, it will have to shut down, according to an internal agency memorandum given to The New York Times by a critic of the agency.
Agency officials say, and Congressional leaders agree, that the legislature will almost certainly act to keep the program running. “It would be very surprising to us if they wouldn’t address this,” said Steven C. Preston, the administrator of the S.B.A.
But even a temporary shutdown could delay aid to victims of the ice storms in the Midwest and other recent natural disasters, and would further hamper a program that was widely criticized for its slow response to the hurricanes that hit the Gulf Coast in 2005.
Here’s the deal: the Small Business Administration decided not to ask Congress for any money to pay for running the disaster program in the 2006 fiscal year, because there was a little money left over from 2005. When some disasters struck, and some small businesses needed to rely on the disaster aid, the SBA ran into financial trouble. Now it wants a congressional bailout. As the NYT noted, the problem “highlighted a continuing pattern of mismanagement and poor planning at the S.B.A.”
How could this happen? Who’s running this agency? I’m glad you asked.
When the White House needed someone to head the Small Business Administration, he first turned to Hector Barreto, a former Republican fundraiser who had no experience or relevant qualifications. As is usually the case with Bush’s partisan cronies, the SBA was mismanaged and slammed for its poor performance, particularly in response to disaster loans.
Barreto eventually resigned, giving Bush the opportunity to find a more qualified nominee. Instead, the president went with another crony.
Steven Preston, the little-known lawn-maintenance executive the White House tapped…to replace Hector Barreto at the helm of the Small Business Administration is stirring up some industry advocates. They say the Chicago businessman and Bush loyalist is no friend of theirs….
[H]is resume shows he has no experience as an entrepreneur and comes from a company with a reputation as a bully among some small-business owners.
Preston is a self-described “committed Republican,” which apparently was the principal qualification for the job. Put it this way, Bush’s choice to head the Small Business Administration “does not have experience running a small business.”
Now, we’re seeing the consequences of the decision. “We need to look at a comprehensive overhaul of the agency as well as the disaster loan program,” said Rep. Nydia Velázquez (D-N.Y.), the new chairwoman of the House Small Business Committee. “Something has to change in the management of this agency.”
This is another instance in which a government agency was effective under Clinton (when personnel decisions were based on qualifications), and proceeded to fall apart under Bush (when personnel decisions are based on whether you want to see Roe v Wade overturned).
Paul Krugman noted a while back that recent history “shows that a president who isn’t serious about governing, who prizes loyalty and personal connections over competence, can quickly reduce the government of the world’s most powerful nation to third-world levels of ineffectiveness.”
Krugman was referring to FEMA, but it’s a description that could apply to so many agencies.