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Washington — The Trump administration on Friday is expected to cut 40% of the Small Business Administration staff as part of its wider effort to shrink the federal bureaucracy, three sources familiar with the plans told CBS News.Around 8,000 people, or less than half-a-percent of the entire federal workforce, are employed at the SBA, according to the most recent data available. Staff is spread out in district offices across the country. Texas has more SBA employees than any state, including the District of Columbia, where the agency is headquartered. Speaking at the White House on Friday morning, President Trump announced that SBA will be responsible for handling federal student loan programs, one day after signing an order to begin winding down the Department of Education, which currently manages the programs. Experts warned that the order could throw student loans into disarray and lead to frustration for millions of borrowers. Administration officials have previously said that student loan programs would eventually be transferred to an agency like the SBA or the Treasury or Commerce Departments.The SBA was established by an act of Congress in 1953 when Dwight D. Eisenhower was president to “aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns.” It provides loans to businesses that fall victim to natural disasters and offers support on international trade issues. The agency’s federally backed loans and grants were a lifeline to small businesses and nonprofit groups during the COVID-19 pandemic.
The Senate voted to confirm former Sen. Kelly Loeffler to lead the agency in February. In a video posted to X on Friday, Loeffler said it’s time to “rightsize the agency.””Since the pandemic, the SBA has doubled its workforce, expanding in size, scope and spending with miserable results,” Loeffler said in the video. “That’s why change is coming to the SBA. … This agency is done wasting millions of tax dollars to fund a progressive pandemic-era bureaucracy. We will not allow fiscal mismanagement to threaten our loan programs or criminals to get away with fraud. But we will evaluate every program and expenditure and we will rightsize the agency to transform the SBA into a high-efficiency engine for America’s entrepreneurs and taxpayers.”
Arden Farhi
contributed to this report.
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Ed O’Keefe
Ed O’Keefe is CBS News senior White House and political correspondent. He previously worked for The Washington Post covering presidential campaigns, Congress and federal agencies. His primary focus is on President Biden, Vice President Harris and political issues across the country.
