Obama Proposes to Close the Small Business Administration as Predicted
October 31, 2012
Petaluma, Calif. – Tuesday, President Obama reiterated his administration’s plans to combine the Small Business Administration (SBA) with the Department of Commerce. The American Small Business League (ASBL) maintains this move is aimed at eliminating small business programs under the guise of saving money.
On November 25, 2008, ASBL President Lloyd Chapman issued a press release predicting that President Obama would attempt to close the SBA by combining it with the Department of Commerce. He made the same prediction in November 2010 and August 2011.
Chapman believes President Obama's latest move is prompted by pressure from lobbyists of large corporations that want 100 percent of all federal contracting dollars. The federal government has a congressionally mandated goal of awarding 23 percent of federal contract dollars to small businesses. However, because of fraud and abuse, billions of dollars in contracts earmarked for small businesses are systematically diverted to large corporations.
Since 2003, a series of more than a dozen federal investigations have discovered billions of dollars in federal small business contracts that have been diverted to some of the largest corporations in the United States and Europe.
Some of the companies that have received federal small business contracts include Lockheed Martin, Boeing, AT&T, Raytheon, Dell, British Aerospace (BAE), Rolls-Royce, Hewlett-Packard, IBM, Oracle, and an international arms dealer owned by the Russian government named Rosoboronexport.
The ASBL is also concerned President Obama’s plans will destroy several years of documented fraud and abuse of federal small business contracting programs.
“Once the SBA and the Department of Commerce are combined, 10 years of documented fraud and abuse of small business contracting programs will be a moot point, “said Chapman. “U.S. Census Bureau data tells us that small businesses create more than 90 percent of all net new jobs. Closing the only agency to service the nation’s 27 million small businesses where most Americans work would be economic lunacy. If Obama wants to create jobs, he should quadruple the SBA’s budget, not plan to close it by combining it with the Department of Commerce.”