The Bush "bailout bill" has drawn some criticism from small business enthusiasts, namely the American Small Business League (ASBL) unsurprisingly.

"Not only does this bill not contain any provisions that specifically help small business, it has provisions that could actually harm middle class firms. The language in Section 107 of the bill is totally inconsistent with the stated objectives of this legislation," says ASBL President Lloyd Chapman.

The part Chapman is talking about says, "For the purposes of this Act, the Secretary may waive specific provisions of the Federal Acquisition Regulation upon a determination that urgent and compelling circumstances make compliance with such provisions contrary to the public interest."

"It is clearly not necessary to suspend federal acquisition law to bail out Wall Street and the financial industry," says Chapman. "I am very concerned the Bush Administration included that language to give them the authority to further dismantle federal programs designed to assist small businesses. We got into this situation because of a lack of proper regulation and now the same people that are responsible for these staggering economic problems want to be able to ignore any sections of federal contracting law they deem necessary. George Bush has proven time-after-time that he cannot be trusted especially when it comes to small business issues."

The ASBL has been very vocal about its criticism over the federal government and the way it handles small business contracts, often calling attention to "schemes" aimed at giving said contracts to large firms. They note that President Bush has cut the Small Business Administration's (SBA) budget in half, and cut funding and oversight for every program assisting small businesses, including woman, minority and veteran-owned firms.
 
The ASBL has not limited its criticism to the Republican Party though. Democrats have been just as fair game. The ASBL has also called out Senator John Kerry for "backing federal legislation to give small business contracts to venture capital firms and billionaires."

The American Small Business League, a nonprofit organization that represents small businesses across the nation (100,000 by its own count), today expressed fears that the revised $700 billion financial rescue package being considered in Congress this week could allow the federal government “to completely ignore the federal government’s small business contracting goals,” according to a statement from the group.

The latest version of the Senate bill, which is expected to be quite similar to the one defeated in the House of Representatives save for stronger homeowner protections, could contain language, as did the doomed bill, that would waive provisions of federal acquisition law pertaining to small businesses. “It’s just a typical Bush Administration move where they’ll put something in a bill that doesn’t need to be there just to give themselves more power,” says league president and founder Lloyd Chapman.

Chapman says such a loophole would allow the Secretary of the Treasury to ignore federal rules that direct billions of dollars in government contracts to women-, minority- and veteran-owned small businesses. “This allows the Bush Administration complete leeway to abolish federal contract laws that affect small businesses,” he says.

Entrepreneur is seeking a response from the federal Small Business Administration.

As things stand, Chapman points out that the federal government has already diverted federal small businesses contracts to major corporations, some of them based overseas. A Department of the Interior Inspector General report (PDF) from July states that federal small business contracts have gone to the likes of Home Depot, John Deere and Starwood Hotels. “Fortune 500 firms are getting billions of dollars a year in federal small business contracts,” Chapman says.

“Let’s put a provision in the rescue package that says they can no longer do that.”

Source:  http://www.entrepreneur.com/blog/entry/197400.html

Everyone (who didn’t get it before) is starting to understand why the $700 billion Emergency Economic Stabilization Act is necessary to ensure that the credit markets start flowing and that banks feel comfortable enough to loan to individuals, businesses and other banks.

Many people say that at the heart of the legislation is the urgency to undergird the needs of small businesses and their ability to draw credit for payroll, product development and operations. If that is the indeed the case, then lawmakers should definitely vote yes, but they should take a critical look at certain questionable elements of the bill before doing so.

For example, why did the Bush Administration decide to give the Treasury Secretary the authority to waive specific provisions of the Federal Acquisition Regulation in the proposed bailout? All Federal Executive agencies are required to adhere to FAR in their acquisition of supplies and services with appropriated funds. But most important to BlackEnterprise.com audiences FAR stipulates minority procurement of government contracts.

President Bush has not been a fan of affirmative action and by extension he has not been kind to the Small Business Administration along with 8 (a) programs that entitle women, veteran and minority-owned businesses to a certain portion of government contracts.

The American Small Business League has gone so far as to accuse the bill of having “Anti Small business” language. Of course the bill does NOT say “Don’t give government contracts to minorities.”

But when you take into account the fact that the SBA refuses to release statistics about the budget for fiscal year 2007 I understand why the ASBL might be led to think that the Bush administration has something fishy up their sleeves. Especially when the time frame in Section 107 is completely open-ended.

Lloyd Chapman, president and founder of the ASBL said in an interview that minorities are losing 90% of all the small business contracts to large businesses. Some of the names of companies who he reports are receiving this small business money include Boeing, Halliburton, Lockheed. Businesses? Yes. Small? Definitely not.

“Since Bush was elected he’s done everything he can to try to dismantle federal programs for minorities and small businesses and women owned firms,” says Chapman, listing here several other accusations against the Bush administration:

• He refused to implement a seven year federal law directing that 5% of federal contracts be set aside for women-owned firms.
• He closed the office of the SBA to help veteran-owned firms 18 months ago
• He cut the SBA budget and staff by over 50%
• The SBA (which is run by a Bush appointee) has refused to release names of firms that received small business contracts, and it is appealing to the 9th circuit court of appeals a federal court order that has directed them to release the names of firms that received small business contracts.

Chapman says the government reports giving $80 billion of small business contracts to small businesses last year. “But when you ask them who did that go to exactly? You have to spend a quarter million dollars in federal court to find out,” says Chapman. ”What do you think that means?”

That means that Senate and House members should still vote yes on the bailout. But knowing the administrations history they need to be cautious about the language used to give the Secretary of Treasury-a Bush crony-the right to waive regulations that safeguard a seat at the table for small and minority businesses. If Chapman’s assertions are correct, then the Bush administration is basically saying “We want to repeal the law, but trust us we’re going to make every effort to include small businesses.” Well there is a law now and they aren’t complying.

Chapman put it best when he asked?

“What would you rather have from a government that has diverted small business contracts to fortune 500 companies? Would you rather have a law or “We’ll do the best we can?”

Marcia A. Wade is the interactive reporter at Blackenterprise.com

Source:  http://politics.blackenterprise.com/2008/10/01/far-reaching-bailout/