Magazine article Management Review

The SBA Woos Small Business

Magazine article Management Review

The SBA Woos Small Business

Article excerpt

The Small Business Administration has led a charmed existence during the first half of the Clinton Administration. Its two directors--Erskine Bowles and now Philip Lader, whom the President named as Bowles's successor this fall--have both been 24-carat FOBs (Friends of Bill), earning the agency a seat at the Administration's policy-making High Table. At the same time, however, the SBA has taken the leadership in trying to sell controversial Administration policies to a skeptical constituency--effectively alienating the same small business-people and their Washington representatives that the agency claims to be looking out for.

As SBA administrator, Erskine Bowles saw himself as the ombudsman for America's small businesses in the Clinton Administration--the man small businesses could turn to when they needed the ear of the President, a voice at the policy table or a helping hand of money and influence. "Small business is the engine that drives the nation's economic train," Bowles explained to Management Review in his final interview before leaving the agency for the White House and his new position as deputy chief of staff to the President. "The President convinced me to take [the SBA] job by using this analogy: 'Historically, big business has always had access to the President, whether he's Republican or Democrat. A person like [General Electric CEO] Jack Welch can always get to a President. Big labor, too. But small business owners historically have not had access. I want to change that. I want to use the SBA as my eyes and ears in the small business community.' That's why we have the impact we have."

Officials close to Phil Lader insist that there will be no change in the SBA's tone or direction under Bowles's successor--that the closeness of both men to the President guarantees that the policies and initiatives undertaken by the agency spring from a single source and will not be changing for at least two more years.

Indeed, Lader himself is even closer to the President in many key respects than Bowles was. A graduate of Harvard Law School and, like the President, Oxford University, he headed a major resort development firm. But what most cemented his ties to the First Family were the annual "Renaissance Weekends" he organized years ago that have become the single most important bonding retreats for America's Democratic leadership. Not surprisingly, Lader was one of the first non-Arkansans that the Clintons summoned to Washington, where he became a spearhead of the "reinventing government" movement to downsize and streamline the federal bureaucracy. However, he will bring to the SBA many of what small businesses see as the ideological shortcomings of Erskine Bowles.

Small business has always looked with a jaundiced eye at the SBA. Certainly, there's always been a healthy dose of skepticism, at times bordering on hostility, between the two, which is derived more often than not from a broader skepticism of Big Government--the relative clout wielded by massive government agencies when they decide to come down on small businesses. Still, neither the patrician former investment banker Bowles nor the Oxford-educated Lader appears to be the kind of person the corner dry cleaner would think to approach for help.

However, it's not their background that's kept America's small businesspeople skeptical of the SBA administrators' good intentions. Ironically, their reluctance to embrace the SBA wholeheartedly is due to the closeness of Bowles and Lader to the President, their presence on the White House's National Economic Council and their input at the highest levels of the Administration's economic policy-making.

"The President has both of them at the table," says Jack Faris, president and CEO of the 600,000-member National Federation of Independent Business. "They are bright spots in this Administration. But they have a real credibility problem. Bowles was such a die-hard supporter of the President's healthcare and economic plans, which were not good for small business. …

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