Group Charges Obama Is Backtracking from Tax Promises


Group Charges Obama Is Backtracking from Tax Promises

By WebCPA staff
November 26, 2008

A small business advocacy group is accusing President-elect Barack Obama of backing away from his campaign promises before he even takes office.

The American Small Business League, which had supported Obama during the campaign, said it has noticed a disturbing pattern in which some of Obama's tax and small business proposals that had been prominent during the election campaign have been removed from the transition team's official Web site,

One such tax proposal was to enact a windfall profits tax on the oil and gas industry to provide a $1,000 emergency energy tax rebate to American families. Another campaign promise would have ended the diversion of federal contracts for small businesses to corporate giants such as Dell and Lockheed Martin, a key rallying point for the group.

"In terms of these small business issues, say for example, restoration of the SBA budget, staffing, business contracting, and those types of issues, we've worked with the Obama campaign, but we haven't seen any movement to coming to some kind of plan or a strategy," said ASBL spokesman Christopher Gunn. "We haven't seen the type of substance we've been looking for in terms of the small business community in this time of economic recession."

Earlier this week, Obama and his advisors signaled another possible change in tax policy: that he may not raise taxes on people who earn more than $250,000 per year when he takes office to pay for his health care program and middle-class tax cuts. Instead, he may simply allow the Bush tax cuts to expire at the end of 2010.

The group pointed to the fact that the promise about the windfall profits tax was displayed prominently at the top of the economy section of Obama's campaign Web site prior to the election. That same information was transferred to Obama's transition Web site, but was recently removed without warning (pre-change, ; post-change,

One reason for the change on the Web site could be the steep drop in gasoline prices in recent months, which has dampened the argument for taxing the oil and gas giants on their excess profits. But Gunn believes that gas prices will eventually creep back up to the levels seen earlier this year.



Credit still hard to get for retailers


Credit still hard to get for retailers

By Bob Koslow
East Volusia News
November 21, 2008

DAYTONA BEACH -- If one goal of the federal government's $700 billion emergency economic aid package passed in October was to restore access to credit, local retailers are not feeling an improvement.

"We are trying to work with a new vendor to get iPods in the store and approval is just taking forever," said Jan Arnett, owner of Z-Best Furniture Electronics & Appliances in Palm Coast with other stores in St. Augustine and Orange Park.

So, for short-term credit, Arnett uses his business credit cards to buy inventory and then pay off the cards as the products sell. He also has abandoned plans to build a new store in Ormond Beach until the economy recovers and traditional commercial credit is cheaper.

Nejma Peter, owner of Nejma's Boutique, was preapproved for a bank loan to build a three-unit retail shop behind her Flagler Avenue store in New Smyrna Beach. Plans had also been approved, but the bank withdrew its approval recently because it did not have the money to lend, said Peter, who also has a shop in DeLand.

"I was upset at first, but now I feel lucky that I was not caught with new shops that no one wants to rent," she said.

A lack of access to credit became critical in late summer as banks and lenders tightened, slowed or stopped lending because they became too overwhelmed with debt from holding distressed mortgages and foreclosed homes they could not sell. That sparked a financial market meltdown, economists said, and threatened the lifeblood of many small businesses, said J. Craig Shearman of the National Retail Federation.

"It is essential for businesses to have access to reliable sources of credit to buy inventory and make payroll," he said. "It is also important that consumers have access to credit cards and to make installment payments."

Money from the $700 billion package was supposed to buy mortgage-tainted securities from banks and lenders so they could be stabilized and would resume lending to revitalize the declining economy.

That did not happen.

Instead, the federal government used $125 billion to buy shares in nine major banks and another $37.56 billion for shares in another 21 smaller banks. The goal was to infuse banks with cash to lend, but there are no requirements that banks use the cash that way, said Lloyd Chapman of the American Small Business League.

"There is nothing in the package for the nation's 27 million small businesses that employ about 56 percent of American workers, especially retail owners," he said. "It was passed in a hurry so no one had time to read it all."

U.S. Treasury Secretary Henry Paulson announced about two weeks ago another bank infusion is planned as a quicker, more-efficient way to free up auto and student loans and back the issuance of credit cards.

"It's a complicated and fluid problem, and steps need to be taken right away. If that helps, we are all for it," said Bill Rys of the National Federation of Independent Businesses.

But a slowdown of spending is a bigger problem than lack of access to credit for most small businesses, which primarily deal with community banks that are not as burdened with risky mortgages and have more money to lend, Rys said.

Local retailers agree.

"We have been in business for 32 years, and this is the first year we have not seen positive growth," said Russ Dotson, who runs his family's Dale's Shoes in Daytona Beach. "We don't deal with the banks but with our vendors, and we have good relationships with them so we are not having a problem with credit."

"We are getting traffic in, but business is down 40 percent from last year," said Gus Gibbs, owner of Gus Gibbs Clothing and Collectibles in DeLand. "We have been here 31 years and have good credit with smaller banks and our vendors."

To combat a lack of shoppers, most retailers are cutting operational expenses and ordering less merchandise for the critical holiday shopping season

It's too early to tell if the government's plans and efforts are succeeding, said Barton Weitz, executive director of the University of Florida's David F. Miller Center for Retailing Education, who calls the future retail picture "grim."

"It has not filtered down to where the banks are making new loans," Weitz said. "To improve their chances to get new credit, retailers have to retool their business plans to reflect the times and show banks concrete ways they plan to cut costs. It's not going to be good for the next six to 12 months."


Obama's Website Drops Small Business Promise

Press Release

Obama's Website Drops Small Business Promise

November 20, 2008

Petaluma, Calif. - President-elect Obama's pre-election promises to end dramatic and well-documented abuses in federal small business contracting programs are conspicuously absent from the "Agenda" on the new Obama-Biden website. (

In February Senator Obama released this statement, "It's time to end the diversion of federal small business contracts to corporate giants." The Obama statement was in response to a series of federal investigations and mainstream media stories that found the Bush Administration had diverted billions of dollars in federal small business contracts to Fortune 500 firms. (

Some of the federal investigations found "false certifications" and "vendor deception" were responsible for large businesses receiving government small business contracts. (

The Department of Interior Office of Inspector General released a report on July 1st that found they had awarded millions of dollars in government small business contracts to Fortune 500 firms such as Dell Computer, John Deere, Home Depot and Sherwin Williams. (

A recent Washington Post investigative story discovered as much as 38.5% of $89 billion in federal small business prime contracts were actually awarded to Fortune 500 firms. (

The Small Business Administration (SBA) Office of Inspector General released the results of an extensive investigation into the Bush Administration's diversion of government small business contracts to large businesses in 2005. It stated, "One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (

Based on the federal investigations and information obtained from a series of successful law suits against the Bush Administration, the American Small Business League (ASBL) projects as much as $100 billion a year in federal small business contracts are diverted from middle class firms to Fortune 500 companies and hundreds of other large businesses.

"We are very disappointed that President-elect Obama appears to have already gone back on his campaign pledge to millions of American small business owners. They supported him expecting the 'change' he promised. Considering the dire state of our nation's economy, I cannot imagine why President-elect Obama has not offered any specific plan to end the dramatic abuses in existing federal programs to assist small businesses and firms owned by women, minorities and veterans," stated ASBL President Lloyd Chapman.