"Venture capital is risky business in the hands of professionals. When done by the federal government it tends toward the disastrous, as the Small Business Administration is now admitting about its decade-long attempt to outsmart Warren Buffett.

The SBA launched its Participating Securities program in the early 1990s on the dubious premise that there wasn't enough venture capital for small start-ups. The program guarantees loans to venture-capital funds, and it has backed a few winners. But it has also backed more than a few dogs, such as the $60 million Zero State Capital VI fund, which invested in "new and emerging technology firms," though apparently not "emerging" enough. The fund is expected to go into receivership in May, and the Boston Business Journal recently reported that company executives now admit the fund, which was launched in 1999, was an "unmitigated disaster." No kidding.

After 10 years the entire Participating Securities program has estimated losses of $2.7 billion, SBA head Hector Barreto told Congress last month. Of that, "$I.7 billion ... are realized cash losses," he said. Actually, it's worse: We're still years away from knowing the program's ultimate burden on taxpayers because venture-capital funds are given 10 years to repay the money. The government's total exposure as of last September 30 was $11.25 billion.

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The good news is that the SBA's Associate Administrator for Investment, Jaime Guzman-Fournier, is expected to recommend that the program be killed when he appears today before the House Small Business Committee. But no bad idea ever dies an easy death in Congress. And at today's hearing, Chairman Don Manzullo (R., Illinois) is expected to promote "reform" instead of mercy killing.

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Republicans of all people should know better than to tax some Americans more so that the government can invest in businesses that couldn't raise enough private capital. Congress can't even balance the budget, much less pick a winning telecom or biotech stock. This one isn't even a close call."