Lawmakers and small business advocacy groups Friday applauded President Obama’s decision to add a cabinet seat for the head of the Small Business Administration, but many were hesitant to back his broader proposal to restructure part of the federal government.

On the heels of the president’s announcement that SBA Administrator Karen Mills would join his cabinet, Sen. Mary Landrieu (D-La.) and U.S. Rep. Sam Graves (R-Mo.), the heads of their chambers’ respective small business committees, commended the elevation of her position. Landrieu expressed confidence that Mills would “keep small business issues at the forefront of the conversation” in the cabinet, while Graves said he hopes that she helps the president better understand the needs of the nation’s smallest employers.

“This platform could provide an opportunity to advocate for small businesses in an environment where important decisions are made,” Graves said in a statement.

Several small business support and advocacy groups echoed the lawmakers’ remarks, as the National Association of the Self-Employed, the Small Business Majority and the International Franchise Association touted the move as evidence that the president recognizes small firm’s important role in the economic recovery. The IFA, for instance, expects Mills to use her elevated status to continue pushing for easier access to capital for entrepreneurs.

“Today’s announcement…serves as a stamp of approval for her diligent and proven work to improve small business access to credit during a still very-challenging economic and public policy environment,” IFA chief executive Steve Caldeira said in a statement. “Small business access to credit is the number one challenge facing prospective and existing franchisees and any steps that will enhance small business access to credit will help to boost our economy and create the jobs our country so desperately needs.”

However, both congressional committees and most small business groups aren’t ready to throw their support behind the larger proposal Obama laid out Friday. Should Congress grant him the authority, he plans to merge six federal entities with overlapping commerce and trade responsibilities into a single agency.

“I need to see the details of the [president’s] plan and review any plan put before Congress,” Landrieu said in a statement. “However I am open to streamlining the government, particularly if it will achieve savings and greater efficiency.”

Graves’s reaction was much the same, noting that he looked forward to examining the proposal further. “Decreasing the size of government and reducing bureaucracy is something that I support in principle, however, it is important that any effort to make significant changes to federal commerce and trade programs must be done carefully, and in a way that protects America’s small businesses,” he said.

While most small business groups said they too will wait to hear the details of the president’s plan before passing judgment, at least one organization has already voiced strong opposition. The American Small Business League said it was “vehemently opposed” to the restructuring plan, which the group says would “negatively impact millions of small businesses and reduce the power of the only federal agency that helps small businesses.”

The proposed merger would cut more than 1,000 government jobs while saving an estimated $3 billion over the next decade thanks to reduced paperwork and human resources costs. Obama said he would initially focus on the agencies that support business interests, but ultimately, he hopes to eliminate similar inefficiencies throughout the federal government.

The Obama administration’s first year gets an “F” from a group dedicated to helping small businesses get what it says is their legally mandated share of government contracts.

The American Small Business League (ASBL) has lambasted the president for failing to deliver on a series of promises that the group says he made to small businesses during his run for office. In a press release issued yesterday, ASBL cites his campaign pledges to:

“Restore the Small Business Administration’s (SBA) budget and staffing. To date, the SBA’s budget is less than what it was at the end of the Clinton Administration. During the Bush Administration the SBA’s budget and staffing was cut by more than half. Despite promising to bolster the agency, the Obama Administration has failed to refill key positions, or restore the agency’s budget. Today, the SBA’s staff is at a 30 year low.

“Restore the SBA Administrator to a cabinet level position. Despite encouragement from both Republican and Democratic leaders in Congress, President Obama has refused to restore the SBA’s Administrator to cabinet level status.

“Implement the congressionally mandated 5% set-aside goal for women owned firms. To date, the Obama Administration has failed to honor that promise.

“End the diversion of federal small business contracts to corporate giants. Since 2003, more than 15 federal investigations have found that billions in federal small business contracts have been diverted to Fortune 500 firms in the U.S. and some of the biggest firms in Europe and Asia. In February of 2008, President Obama acknowledged the magnitude of the problem by releasing the statement, “‘It is time to end the diversion of federal small business contracts to corporate giants.’”

According to ASBL President Lloyd Chapman, government small business contracts have been diverted to Fortune 500 firms every day since the president took office. “He’s given small businesses less than one percent of the stimulus funds,” Chapman added.

Founded by Chapman, a high-profile advocate for small business, in 2004, ASBL exists to assure that small businesses receive a fair portion of the total value of all prime federal contracts—currently 23%—as mandated by the Small Business Act of 1953. The group assails what it calls “abuses and loopholes” that allow large corporations in the U.S. and Europe to receive federal contracts that should be going to small businesses.

ASBL keeps tabs on large corporations that are included in the federal government’s data on small-business contracting. It asserts that changes in the rules governing this database have made it easier for big players to avoid disclosing their sizes when applying for contracts that ought to be set-asides for small businesses.

On ASBL’s list of “2008 Top Small Business Contractors” are HP, Office Depot, and Xerox.

Source: http://blogs.whattheythink.com/printing-office/2009/11/asbl-the-obama-adminstrations-first-year-short-changes-small-businesses

John (not his real name) is a hard-working guy. He held his first job as a paperboy at the age of 11. As he grew older, he held many other jobs until he found what he calls his “ultimate destiny” at 15 years old. At that time, John secured an after-school and weekend job at a truck repair shop. The wage was low, but John was never happier.

John marveled at everything regarding trucking. He loved hearing the stories of the road offered by drivers waiting for their rigs to be serviced. John used some of his earnings to buy a CB radio for his house so he could listen to the truckers while he was not in school or at work. As soon as it was legally possible, John enrolled in driving school, successfully graduated, and got his endorsement to drive the big rigs that he dreamed of.

John quickly learned that the grand stories of the road that he heard as a teenager represented the best of the situation vs. the day-to-day grind of over-the-road trucking. None­theless, John was happy, making money, and driving for a firm that valued him. Sadly for John, the relationship did not last as the firm was sold and the new owners held totally different philosophies regarding drivers.

Unfortunately, due to the many consolidations and shutdowns in the trucking industry, John found himself switching companies fairly often. While he still loved driving, he loathed the constant uncertainty that his employers offered. Fed up with this, John decided that it was time to become an independent trucker.

He started with one truck, and was able to secure loads with little trouble. However, he still felt a void, and held bigger dreams. Soon, John added a second truck to his business, and before long had 11 trucks in his burgeoning fleet.

Although business was good and his relationships were solid, John and his wife were facing some significant health issues. Their insurance premiums kept rising, non-covered medical bills mounted and their family needs were starting to outpace the personal revenue he was able to generate.

Compounding all of his problems, John’s trucks were older and in constant need of repair. Coupled with a string of unusual and unexpected mishaps, John was constantly under siege.

When the economy collapsed in 2008 and 2009, business was at an all-time low. John’s lenders were nowhere to be found, and he needed more working capital for his business. Because John used so much of his personal credit to take care of his family’s medical issues, plus sustain his business, lenders turned him away empty-handed despite a long and mutually beneficial relationship.

Today, John is almost out of business and confused. As he watches all of the bailout money being doled out to banks, insurance companies, automakers and others, he is especially mystified that Yellow/­Roadway Cos. (YRC) is poised to receive bailout taxpayer money. He has turned to the Small Business Admin­istration (SBA) for assistance and been given short shrift after attempting to contact them no less than 17 different times.

Tuning the Engine

President Obama and Congress continue to say that small business is the engine that powers America. While we all know that this is true, and that small business creates nearly every new job in the United States of America, unfortunately for John and millions of other small businesses, their words do not meet their actions.

The SBA was due to announce small business emergency loans of up to $35,000 during National Small Business Week, but as of this writing, this has now been pushed to mid-June. Why is it that when American Express, Chrysler, Bank of America, General Motors, Chase and other big businesses pick up the phone to Washington, the Treasury runs right over with a blank check and armored cars full of cash, yet John and many others must wait till at least mid-June for possible assistance?

The SBA is an outdated and utterly useless organization. Large businesses are receiving contract awards that had been designated for small businesses. The Senate has shelved a bill (S.2300) that would have corrected this, and Congress followed suit with a similar bill (HR 3867) that also withered away in an unceremonious death.

According to the American Small Business League, billions of dollars designated for small business contracts have been funneled to large corporate behemoths. The SBA’s own Inspector General has confirmed these findings.

Remember when we were told that Chrysler and its ilk were too big to fail? Yet even after giving them so much of our money, they declared bankruptcy and put thousands of our family members, friends and neighbors out of work. Why aren’t our political leaders honest with us? Attempting to save the domestic auto industry has nothing to do with current autoworker jobs; it has everything to do with auto industry retirees who will be courted for their vote during the upcoming elections in 2010 and 2012.

Lest anyone think that I am a partisan on this issue, sadly, neither President Bush nor the 110th session of Congress lifted a finger at the onset of the current financial catastrophe to help small businesses, either.

Regrettably for John, as well as un­told other small business owners, they lack the very powerful and influential lobby that Wall Street, banks, the auto industry and other multinational mega-corporations possess over the White House and Congress.

Truly Irresponsible?

There is a knee-jerk reaction from some people in this country not to bail out people like John for irresponsible behavior. Was John irresponsible? I don’t think so. True, he may have found better ways to access the capital that he needed, but ultimately, he used his funds to hire people, take care of his family and build a business. Unlike others, he didn’t purchase a second home, a boat, a fancy car or some other extravagant items; he chased what many who fight to come to the United States for every day – to start a business.

Over the next few months, you will likely see record numbers of small businesses shutting their doors. Of those that survive, we anticipate seeing large-scale cancellation of employee health plans and other benefits.

In case anyone thinks that I am against mid-sized or large companies, please let me set the record straight. I support businesses of all sizes equally and emphatically. What I do not support is selective bailouts. What is happening today is wrong morally and ethically. This is not the American way that our forefathers envisioned for its citizens.

Is the American dream dead? If you are starting a new business today, I don’t think so. In fact, this is a great time to start a new venture. However, if you are a current small business owner like John who has played by the rules, done the right things and worked hard, sadly, your days are numbered and you will soon be a forgotten statistic.

I wish John and all the other small independent businesses my best wishes and prayers, as they will need all of this and much more in this current economic and political climate.