Obama Refusing to End Small Business Contracting Scandal

Press Release

Obama Refusing to End Small Business Contracting Scandal

August 18, 2011

Petaluma, Calif. – The following is a statement by the American Small Business League:

President Barack Obama has yet to end a small business contracting scandal that costs the nation millions of jobs every year. This comes as the president wraps up his Midwest jobs tour and the nation awaits his next job creation plans.

The small business community creates 90 percent of net new jobs, according to the U.S. Census Bureau. Yet large businesses annually receive hundreds of billions in federal contract dollars intended for small businesses.

In April 2010, Senator Mary Landrieu (D-LA), Chair of the Committee on Small Business and Entrepreneurship estimated that, “increasing contracts to small businesses by just 1 percent,” would create more than 100,000 new jobs. Based on an American Small Business League (ASBL) examination of government contracting data, and Chairwoman Landrieu’s estimation, ending this abuse would create upwards of 1.8 million jobs.

Since 2003, a series of federal investigations have uncovered billions of dollars in federal small business contracts going to some of the largest companies in the U.S., Europe and Asia. During FY 2010, 61 of the top 100 recipients of small business contracts were actually large businesses.

During President Obama’s 2008 campaign he stated, “Small businesses are the backbone of our nation’s economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants.”

Despite the president’s campaign promise, his administration’s most recent small business data includes small business contracts awarded to Lockheed Martin, Raytheon, L-3 Communications, Hewlett-Packard, and AT&T, among many others. The Small Business Administration Office of Inspector General has named the issue the agency’s top management challenge for the last six consecutive years.

According to officials, this September President Obama will announce fresh ideas on job creation, including infrastructure investment and tax cuts. Thus far, he has not addressed problems in the nation’s largest and oldest job creation plan, the Small Business Act. This legislation directs federal infrastructure spending to the middle class by mandating 23 percent of all federal contract dollars go to small businesses.

“The SBA was created by Congress to create jobs and direct federal infrastructure spending to the middle class,” said ASBL President Lloyd Chapman. “President Obama has allowed these programs to be hijacked by large corporations.”


New Bill Will Slash Small Business Programs

Press Release

New Bill Will Slash Small Business Programs

August 10, 2011

Petaluma, Calif. – Senate Republicans have introduced a bill that could eliminate all federal programs to assist small businesses, as well as women-owned, veteran-owned and minority-owned firms. Senator Richard Burr (R-NC) introduced S. 1116, titled the “Department of Commerce and the Workforce Consolidation Act,” which would combine the Small Business Administration (SBA) with the Department of Labor and the Department of Commerce, a move that could devastate U.S. job creation.

Republicans have attempted to abolish the SBA for nearly three decades. President Ronald Reagan tried to shut the agency down on two separate occasions. Senate Democrats, led by Senator Carl Levin, prevented President Reagan’s efforts to close the SBA. (http://americansmallbusinessleague.blogspot.com/2010/01/republicans-push-to-end-federal.html; http://www.time.com/time/magazine/article/0,9171,961270,00.html)

Again in 1996, the Republican controlled House of Representatives attempted to eliminate the agency. Their proposed legislation would have closed the SBA and brought an end to federal programs established to assist America's 27 million small businesses. (http://www.cbo.gov/doc.cfm?index=6&type=0)

Republican President George W. Bush removed the SBA Administrator from a Cabinet-level position and slashed the SBA budget by more than 60 percent. In 2008, the SBA budget was less than half of what it was under the Reagan Administration. (http://www.inc.com/magazine/20030901/sba.html;  http://www.biztimes.com/news/2005/12/9/half-full-or-half-empty)

As Senator Burr’s bill works its way through committee, Congress holds the fate of our nation’s chief job creators. According to the US Census Bureau, small businesses create more than 90 percent of all net new jobs. 98 percent of all US firms have less than 100 employees. These firms employ more than half of the private sector workforce, are responsible for half of GDP and more than 90 percent of all US exports. (http://archive.sba.gov/advo/research/rs359.pdf; http://www.sba.gov/advocacy/7495/8420)

As early as January 2006, American Small Business League (ASBL) President Lloyd Chapman predicted that Republican leaders would try to effectively close the SBA by combining it with the Commerce Department. (https://www.asbl.com/showmedia.php?id=148)
“The SBA represents small businesses and the Commerce Department represents the largest corporations in America,” Chapman said. “Their interests in federal contracting are diametrically opposed. This is a ploy by Republicans to end federal programs for small businesses, women-owned, minority owned and veteran owned firms and divert 100 percent of all federal contracts to their Fortune 500 backers. It will force small businesses all across the country to close their doors and kill millions of jobs.”