In the face of sluggish job growth and a growing deficit, the Obama Administration and Congress are focusing on solutions that may hurt the nation’s chief job creators, while ignoring a simple, effective, and deficit neutral solution to job creation and economic stimulus.  Every year, billions of dollars in federal contracts intended for small businesses, are diverted to Fortune 500 firms and other large businesses.  Ending this abuse, would invigorate the nation’s 27 million small businesses, supercharge job creation, and slash America’s growing deficit.

Despite strong rhetoric, to date the Obama Administration’s economic policies have failed to substantially aid small businesses or cut unemployment.  

In January, the national unemployment rate remained above 9 percent, according to the U.S. Department of Labor.  (http://www.bls.gov/news.release/empsit.nr0.htm) Moreover, the Department of Labor’s 9 percent figure is exclusive of job seekers who have stopped looking, and workers who are underemployed.  These groups are accounted for in the Department of Labor’s U-6 unemployment figures, which remained above 16 percent in January. (http://www.bls.gov/news.release/empsit.t15.htm)
 
According to the U.S. Census Bureau, small businesses create more than 90 percent of net new jobs, are responsible for 50 percent of the gross domestic product, 50.2 percent of the private sector workforce, and 90 percent of exports and innovations.  It is unreasonable for the Obama Administration to spend more than $1.6 trillion on economic stimulus, while failing to make small businesses a priority. (http://www.sba.gov/advo/research/rs359.pdf)

Since 2003, a series of investigations have shown that the overwhelming majority of federal small business contracts actually go to Fortune 500 firms. The American Small Business League (ASBL) maintains ending the diversion of small business contracts to corporate giants would be the simplest, deficit neutral solution to America’s economic problems.  The ASBL has estimated that ending this abuse would direct more than $200 billion a year to the nation’s middle class, save thousands of businesses every year and create more than 1.8 million jobs.

“You don’t have to be a Nobel Prize winning economist to figure this out.  Small businesses are the nation’s chief job creators, and the most effective way to create jobs is to send federal spending their way,” ASBL President Lloyd Chapman said. “There is one major bill that would accomplish that goal, the Fairness and transparency in Contracting Act.  It is time for President Obama to keep his promise to end the diversion of federal small business contracts to corporate giants by passing this legislation.”