Lawmakers React to SBA Head's Possible Move to HUD

Lawmakers showed mixed reaction to the president's intention to nominate Steven Preston, the head of the Small Business Administration, to the helm of the Department of Housing and Urban Development.

Sen. John Kerry (D-Mass.), who heads the Senate Small Business and Entrepreneurship Committee, said he'll be "sorry to see him go" and commended Preston for working to fix an agency that has been in disarray. "We may have some differences on policy, but he's always been professional, responsive and dedicated to the mission," Kerry said in a statement.

But in the House, Rep. Nydia Velazquez (D-N.Y.), who heads that chamber's small business panel, said: "Trading one troubled agency for another is short-sighted, and it could not come at a worse time for the American people."

The agency that Preston "has been responsible for leading is still plagued by serious problems of its own," she added. "Large businesses continue getting small business contracts, SBA's Katrina disaster relief program is a failure, and morale of the agency's personnel is one of the lowest in the federal government."

Preston is no stranger to controversy, which he met head-on after taking over the troubled small business agency. He suffered harsh criticism for the way the SBA handled aiding small businesses in the Gulf region after hurricanes Katrina and Rita, a complex task he inherited from his predecessor Hector Barreto, who resigned as head of the SBA after a tenure marred by problems stemming from the agency's handling of the Sept. 11 terrorist attacks and the devastating hurricanes.

The housing department has been at the center of policy debate recently as it struggles to cope with rising mortgage default rates and collapsing home values. Preston would take over for Alphonso Jackson, who resigned following allegations of favoritism in his dealings with a Philadelphia developer and criticism of his failure to implement an adequate response to the housing industry crisis.

Preston became chief of the SBA in 2006 after working as an investment banker with Lehman Brothers. He also was a top executive with ServiceMaster.

I interviewed Preston last July on his vision for the SBA in the wake of hurricanes Katrina and Rita. To read the interview click here.

By Sharon McLoone |  April 18, 2008; 1:44 PM ET Policymakers
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Please email us to report offensive comments.

Housing is a huge industry, why isn't somebody from the industry appointed to head a housing agency?

Posted by: Anonymous | April 18, 2008 6:28 PM

Who will head the SBA?

Posted by: Dennis | April 18, 2008 8:49 PM

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