By Kathryn Kretschmer-Weyland
February 6, 2006

George A. Cloutier, Chairman and CEO of American Management Services and Chairman of Partner America™ delivered remarks at the opening plenary session at the 74th Winter Meeting. Cloutier struck an important chord with mayors, recounting how small businesses are the driving force behind any economic turnaround and it has historically been small businesses, not large corporations that have pulled our nation out of economic slumps.

"Unfortunately, the reality is that there have been major budget cuts at every level of the federal government which affect programs that benefit our nation's 23 million small businesses. If we really want to improve the nation's economy, small business programs need to be funded not cut." said Cloutier.

The 2006 budget number for the Small Business Administration is down $123 million from 2005 and nearly 60 percent from 2001. Borrowers and lenders are now faced with a dramatic hike in fees to cover the government's share of what is billed as a "public-private partnership."

"We can not afford these cuts. Nor can your cities. A healthy small business sector means healthy cities. Our economic well-being and job growth depends on an empowered small business community. If small business is to grow and prosper, we need to increase, not decrease, funding for SBA and its assistance programs," according to Cloutier.

For about $300 million to $350 million, virtually all the programs could be funded at levels authorized by Congress. Additionally, if recent fee increases were reversed, thousands more borrowers could get the loan they need. If fully funded, the SBA's 7(a) and 504 loan programs would be creating an estimated 742,000 new jobs each year, the SBA's Small Business Development Centers would be creating more than 90,000 new jobs each year, producing $250 million in federal tax revenues and $370 million in additional state and local revenues as a result of increased economic activity each year. An increase in revenue and jobs at the local level means greater economic prosperity for cities over the long run.

Cloutier concluded by saying "I am asking mayors and the Conference to support and lobby for increases in funding for small business. It is vital that our nation, states, and cities rally behind the cause of small business. A strong small business sector means a strong economy for us all. Small business is the true heart of the American economy."