According to the latest data from the U.S. Census Bureau, small businesses are responsible for more than 90 percent of net new jobs in America. Small businesses employ half of the private sector workforce, generate more than half of the GDP, and 90 percent of all U.S. exporters are small businesses.

The American Small Business League (ASBL) is concerned that all federal programs to assist small businesses could be in danger as Congress and President Obama negotiate budget cuts to avoid the “fiscal cliff.” 

President Obama has announced plans to essentially dismantle the Small Business Administration (SBA) by combining it with the Department of Commerce. The Department of Commerce is the federal agency representing the interests of our nation’s largest corporate giants.

On November 25, 2008, ASBL President Lloyd Chapman issued a press release predicting that President Obama would close the SBA by combining it with the Department of Commerce. He made the same prediction in November 2010 and August 2011.

For more than 30 years the nation’s largest firms, particularly in the defense and aerospace industries, have pushed to close the SBA in order to end the federal programs mandating that 23 percent of federal contracts be awarded to small businesses. Those big companies want 100 percent of federal contracts and subcontracts, and they have spent hundreds of millions of dollars lobbying Congress to wind down small business programs.

There is currently a bill in Congress that would grant President Obama the authority to combine federal agencies. But the only agencies that he’s proposed combining have been some of the smallest agencies in Washington and would have an insignificant impact on the federal deficit. 

President Obama claims that combing the SBA with the Department of Commerce will save $300 million per year, but he’s also proposed increasing foreign aid by about $9 billion in 2013. To put things in perspective, the proposed $9 billion increase in foreign aid could be used to fund the SBA for a decade.

House Speaker, John Boehner recently acknowledged that small businesses create the majority of net new jobs in America and tax hikes on small businesses could cost the nation about 700,000 jobs. The ASBL believes that if President Obama does combine the SBA with the Department of Commerce, within five years, federal programs for small businesses will essentially have been abolished, which will cost our nation millions of jobs.

“President Obama’s proposal to save money by combing the SBA and the Department of Commerce is ridiculous,” said ASBL President Lloyd Chapman. “The amount of money that will be saved by combining these small agencies will be statistically insignificant. Dismantling small business programs will cost the nation millions of jobs and cause the economy irreparable harm.”

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The American Small Business League is predicting that the Obama administration will try to use the momentum from the fiscal cliff debate to justify plans to dismantle the Small Business Administration.

President Obama recently announced plans to essentially dismantle the SBA by combining it with the Department of Commerce. The administration claims this will save $3 billion over the next 10 years, which is infinitesimal when you compare it to the $56 billion the government has proposed to spend on foreign aid in 2013.

The ASBL believes large federal contractors from the defense and aerospace industry want the SBA closed to avoid prosecution under section 16 (d) of the Small Business Act, which holds a punishment of up to 10 years in prison and a $500,000 fine. Since 2003, a series of federal investigations have found large businesses have hijacked billions of dollars in federal small business contracts.

According to U.S. Census Bureau data, small businesses create more than 90 percent of all net new jobs. They are responsible for half of the private sector workforce, more than half of the GDP, and more than 90 percent of all U.S. exporters are small businesses.

The ASBL predicts that if the SBA is rolled into the Department of Commerce, within a matter of five years, the SBA’s programs will essentially be eliminated and the individual staff at the SBA will slowly be phased out.

“This is an old Washington trick,” said ASBL President Lloyd Chapman. “Every body in Washington knows that combining the SBA with the Department of Commerce is just a scam to direct 100 percent of federal contract dollars to large corporations. This is the last thing we need to do in the middle of the worst economic downturn in 80 years.  Eliminating federal programs for America’s chief job creators would be economic suicide. If President Obama were serious about cutting the deficit and stimulating the economy, he would triple the SBA’s budget and supercharge every federal program for the nation’s 28 million small businesses. “

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