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.”

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

At a hearing Tuesday of the Senate Homeland Security and Governmental Affairs Subcommittee on Contracting Oversight, senators challenged the Small Business Administration’s (SBA) claim that 22.7 percent of federal contract dollars went to small businesses in 2010.

Chairwoman Senator Claire McCaskill (D-Mo.) called the SBA’s claim “an empty achievement.” Billions of contract dollars the agency reported as going to small businesses actually went to large businesses. The federal government is required by law to award at least 23 percent of all prime contract dollars to legitimate small businesses.
http://www.senate.gov/fplayers/I2009/urlPlayer.cfm?fn=govtaff072611&st=930&dur=6675

The federal government’s data indicates that during fiscal year (FY) 2010, billions of dollars went to some of the largest corporations in the United States, Europe and Asia. These include Italian defense giant Finmeccanica, Lockheed Martin, Rolls-Royce, British Aerospace (BAE), Raytheon, General Electric and Ssangyong, a multinational corporation based in South Korea.

Senator McCaskill pressed SBA spokesman Joseph Jordan on why large companies receive small business contracts. She said that counting contract dollars awarded to a business that is no longer small as small business contract dollars is “misleading.” Jordan argued that it was unfair to “punish” a government agency because a business it contracts with becomes successful. 
 
He went on to say that the 2010 contracting data was “the cleanest data ever” despite the fact that, according to the Federal Procurement Data System-Next Generation, 61 of the top 100 small business contractors were actually large businesses. https://www.asbl.com/documents/asbl_2010_dataanalysis.pdf

Since 2003, a series of federal investigations have uncovered billions of dollars in fraud and abuse in small business contracting programs. In Report 5-15, the Small Business Administration Office of Inspector General (SBA IG) referred to the problem as, “One of the most important challenges facing the SBA and the entire federal government today.” For six consecutive years, the SBA IG has named the issue as the number one challenge facing the SBA. https://www.asbl.com/documentlibrary.html#5-15

In 2008, President Obama recognized the magnitude of the issue stating, “It is time to end the diversion of small business contracts to corporate giants.” https://www.asbl.com/documents/20081007_Obama_Promise_Website.pdf 

“Joe Jordan is lying through his teeth,” ASBL President Lloyd Chapman said. “To claim that we are punishing agencies by preventing them from reporting contracts to Fortune 500 firms as small business contracts is ludicrous. He should be forced to resign immediately for making such statements.”

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