President Reagan unveiled the program at an impressive White House ceremony last week -- just in time for the elections. The Housing and Urban Development Department and the Small Business Administration pledged to join forces "to achieve a goal of investing $5 billion in small business in 21 states, creating as many as 300,000 new permanent private-sector jobs within the next four years."

But it turns out the government isn't putting up any new money for the Small Business Revitalization Program; in fact, the contract was awarded in May. "There's no additional money or staff," HUD spokesman Jack Flynn acknowledged. "There's no set-aside for particular businesses in these states."

Instead, HUD and SBA have hired the nonprofit National Development Council to provide "technical assistance" to the states. The two agencies will pay for half the council's $1.6 million contract--from existing funds--and the 21 states just selected by a competition will pick up the rest.

"We will transfer our mortgage banking skills to economic development professionals designated by the states," a council employe said. She added that her 22 staff members would help the states identify promising small businesses and put together private financing deals, in part by seeking money from three federal programs: Urban Development Action Grants, Community Development Block Grants and SBA's "503" development program.

How does this differ from the way those programs have been working? "This is a concentrated effort in these individual states to heighten awareness of the needs that small businesses have," Flynn said.