January 17, 2012

State of Alabama
Press Release: Alabama Department of Commerce

Obama to Elevate SBA Chief

January 13, 2012

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President Barack Obama said Friday that he will exercise his executive authority to elevate the head of the U.S. Small Business Administration to a cabinet-level position.

The announcement came along with a broader proposal from Mr. Obama to combine the SBA with five other government offices that would become a single, streamlined agency. Under the Obama plan, the SBA administration would no longer be in the Cabinet once the reorganization is complete.

One reason for the move might be to counter any perception that small business was being slighted in the broader reorganization. The White House didn't provide details concerning whether the SBA's current administrator, Karen Mills, would be granted a higher authority or additional responsibilities as a result of her elevated position.

The move was greeted with applause by small-business owners who were at the White House Friday.

"As of today, I am elevating the Small Business Administration to a cabinet-level agency," Mr. Obama said. "Karen Mills, who's been doing an outstanding job leading that agency, is going to make sure that small-business owners have their own seat at the table in our Cabinet meetings," he said.

Senior administration officials said the decision speaks to her accomplishments at the agency, such as reducing lender paperwork for SBA-backed loans, enforcing stricter oversight of government contracting and rolling out several laws that facilitated more lending to small businesses.

The announcement also follows accusations by some Republicans that Mr. Obama hasn't done enough to help small businesses. The National Federation of Independent Business, the small-business lobbying group in Washington, is fighting Mr. Obama's health-care law in a lawsuit that is now before the Supreme Court.

Notable small-business advocates, including Sen. Olympia Snowe (R., Maine), the ranking member of the Senate Small Business and Entrepreneurship Committee, have urged Mr. Obama to restore the SBA to cabinet level, as it was under the Clinton administration.

Previous administrations have elevated people to cabinet-level status, which is mostly a symbolic way of saying they and their subject areas are considered important.

"On every small-business issue from day one, Karen has had the president's ear," said Gene Sperling, director of the White House's National Economic Council. "She is a tenacious, tireless and effective advocate for small business."

Because banks tend to be reluctant to extend credit to risky small businesses, the SBA operates a program that makes such loans more enticing to lenders by guaranteeing a portion of each loan against default. A record $30.5 billion in these loans were extended to more than 60,000 businesses in the government's 2011 fiscal year, ended Sept. 30.

—Laura Meckler contributed to this article.

Write to Emily Maltby at emily.maltby@wsj.com

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