The reagan administration has proposed eliminating the Small Business Administration to aid women in business and cutting back all assistance to other minority business owners as part of its new budget.
The programs, some of which were criticized during the last few years for mismanagement, were recommended for budget cuts because the new administration considers them "low-priority or problem programs" and intends for the SBA to hep minorities and women through their general programs, according to an official of the Office of Management and Budget.
The official acknowledged that the government expects to be bombarded with complaints from blacks, Hispanics and women who fought for creation or expansion of their programs during the last four years and who already claim that the Reagan administration is abandoning them.
"There's obviously going to be cries that we're abandoning them," the official said. "It's not a real cutback. It's retaining them at 1980 levels."
In addition, the administration has proposed a 25 percent reduction in all SBA lending and loan guarantees and an increase in SBA loan interest rates from 9 1/4 percent to market rates. These reductions "will have an impact on all business, minority business in particular, because it's difficult for us [blacks] to get bank loans," said Rep. Parren J. Mitchell (D-Md.), chairman of the House Small Business Committee. Mitchell also said a reduction technical assistance for minorities would be "foolish."
The OMB officials also said that to offset some of the cuts in minority programs, the Reagan administration has proposed increasing by about $1.5 million funding for the Minority Business Development Agency in the Commerce Department.
The minority program cuts in the administration's budget revisions distributed on Tuesday were not outlined but were included in a listing called reduction of "technical assistance to special small business groups." The OMB and SBA officials said the cuts would:
Eliminate the separate women's busness enterprise program. Carter had proposed for fiscal year 1982 a budget of $6.4 million. The Reagan budget would reduce the women's staff from 15 to 10 persons and leave about $1 million for "a core group" to aid women as part of SBA's general programs, the OMB official said. Women should be able to get help through regular SBA programs, the official said.
An SBA spokesman, however, said while the women's program will be cut back sharply, the agency may try to divert funds from other programs into the women's funds.
Reduce techincal assistance for socially and economically disadvantaged business owners from $12 million proposed in the Carter budget to $10 million. Under this program, called 7-j, the SBA contracts with private consulatants to give businesses technical assistance.
Decrease funding for business development expenses for socially and economically disadvantaged firms from $24 million in the Carter budget to $20 million, last year's level. This program provides grant money for firms participating in SBA's 8-a minority procurement program to buy equipment and supplies to perform government contracts.
Eliminate the Small Business Development Center program in which about half-a-dozen universities across the country are supposed to give management assistance to small business owners. Howard University was one of the centers, the official said. The program is recommended for termination because it was mismanaged and "tended to benefit the universities more than the small businesses," the official said.
Reduce equal opportunity loans to economically and socially disadvantaged business owmers from $135 million planned by Carter for fiscal 1981 to $117 million and from $135 million in 1982 to $95 million.
Cut surety bond guarantees mostly for minorities from $1.6 billion in authorization proposed by Carter for fiscal 1981 to $1.4 billion.