In the July 12 editorial "Cutting Democracy," The Post dismissed the vote in the House that restored funding for the Small Business Administration's 7(a) Loan Program to last year's level as "arbitrary, even whimsical."

This program operates as a public-private partnership, providing about 30 percent of long-term financing for small businesses. For many small businesses, it's the only alternative to high-cost sources of capital or the use of scarce personal savings.

Regrettably, the bill you cited provided no funds for the SBA program, which would have meant fees increasing substantially for small businesses and their lenders, shutting entrepreneurs out of capital markets and driving community-based lenders away.

Unfortunately, we had few other places to find funding. We are not against the National Endowment for Democracy, but without an entrepreneurial economy that fosters businesses and hires tax-paying workers, we couldn't afford it or any other government program.

While the endowment's goals are laudable, it is not the only source of funds to promote democracy. Many other programs that support these goals were funded at record levels. Further, the endowment's fiscal 2005 budget is slated to exceed its fiscal 2004 budget, even after our amendment was adopted.

While the National Endowment for Democracy is one of a myriad of programs to encourage democracy, the 7(a) program is the largest loan program providing access to capital. Further, much of the endowment's funding has made its way to the allies of national political parties.

Perhaps the two major parties would contribute a small portion of the millions they will use for the political conventions to provide the endowment with additional resources. That way, we can continue to promote democracy throughout the world and support our nation's small businesses.

DONALD A. MANZULLO

U.S. Representative (R-Ill.)

NYDIA M. VELAZQUEZ

U.S. Representative (D-N.Y.)

Washington

The writers are, respectively, chairman of the House Small Business Committee and its ranking Democratic member.