The Blaze

September 27, 8800

NY Times

September 27, 8000

Advocates for small business — including those in Congress — had near uniformly mixed reactions to President Obama’s proposal Friday to temporarily elevate the Small Business Administration to a cabinet agency but then fold the S.B.A. into a super trade and commerce department. Uniformly mixed in that most people The Agenda contacted praised the decision to make the S.B.A. part of the cabinet but expressed caution about the consolidation proposal.

The president called for merging the S.B.A. with the Commerce Department and four trade-related agencies into, as the president put it in a speech on Friday, “one department, with one Web site, one phone number, one mission: helping American businesses succeed.” In a conference call with reporters, Jeff Zients, deputy director for management at the Office of Management and Budget, said the prospective new department would comprise four broad “pillars.” Small business and economic development would be one of those pillars, and the S.B.A would be combined with economic development programs at other agencies into one of those mission areas. (The other pillars would be trade, technology and innovation, and statistics.)

As for concerns that the new agency might dilute the S.B.A.’s authority to speak for small business inside the government, Mr. Zients seemed to suggest that all American businesses might have to ally in a global economy. “This integrated department will be about serving America’s businesses — small, medium and large — as they compete in the global marketplace,” he said.

Once the agencies are merged, Mr. Zients added, the S.B.A. would lose its seat at the president’s table. “Once we have consolidation authority, once this specific proposal passes,” he said, “we will have one integrated department that is led by a secretary who will be on top of all of the important assets and services that serve businesses.” The United States trade representative, whose office would be merged into the new department, would retain a separate cabinet position.

Leaders of the small-business committees in Congress said in separate statements that while they supported streamlining government, they would review the president’s plans carefully. “The details will be critical,” said Senator Olympia Snowe of Maine, the top Republican on the Senate Small Business Committee. “Of particular concern will be ensuring that entrepreneurs do not face new hurdles in obtaining assistance in starting, operating or expanding their small businesses — whether accessing capital, pursuing exporting opportunities, or contracting with the federal government.”

Outside Congress, most small-business advocates treaded with similar care. “On the one hand, reorganizing federal agencies to create a ‘one-stop-shop’ for America’s small businesses could streamline processes and make accessing information and assistance much easier,” Todd McCracken, chief executive of the National Small Business Association, said in a statement. “On the other hand, such a reorganization could minimize the emphasis placed on small business by the federal government and lead to an even greater imbalance toward promoting the interests of large businesses over those of small business.”

John Arensmeyer, chief executive of the Small Business Majority, a group initially formed to back the administration’s health care reform, said: “Right now small business has an independent agency that reflects its needs. The obvious concern is that by bringing this into larger agency there’s a risk that some of that voice gets lost. We know that government is held in very low esteem by small business, but the S.B.A. is an exception to that right now.”

There were some stronger views. For example, the American Small Business League, which protests the diversion of federal contracts for small business to large corporations, sided firmly with the other hand. “This is not a move to save money,” said the league’s president, Lloyd Chapman, in a statement. “This is a move to eliminate federal small-business contracting programs.”

But the head of one trade association for S.B.A.-backed lenders was optimistic. “The lending policies and centralized loan operations of S.B.A. are among the more sophisticated in the federal government,” said Chris Crawford, president of the National Association of Development Companies, which represents lenders in the S.B.A.’s 504 loan program. In a reorganization, “they become the model for the collapse of the far-flung bureaucracies into one unit called small-business lending — worldwide. If anything, even in a larger reconstituted Commerce Department, access to credit for small businesses becomes a primary mission goal with much higher visibility.”

But opposition from the small-business constituency and its Congressional representatives, should it materialize, is only one obstacle for the administration to overcome — many interests, and Congressional fiefdoms, are at stake. Just a few hours after the president spoke, Sen. Max Baucus, the Democratic chair of the Finance Committee, and Dave Camp, the Republican chair of the House Ways and Means Committee, jointly rejected any effort to relocate the Office of the U.S. Trade Representative, an agency under their purview: “Making it just another corner of a new bureaucratic behemoth would hurt American exports and hinder American job creation.”

And if the consolidation were to fail, those small-business advocates just might get the best of both worlds: an independent S.B.A. but with cabinet-level status.

What They Think?

September 27, 4400

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

Washington Post

September 27, 1600

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.