The Obama Administration is Missing the Boat on Job Creation

On Thursday, December 3, President Barack Obama will host a forum on jobs and economic growth to supposedly come up with ideas to cut the highest unemployment numbers in 30 years. I think the President's jobs forum is just another dog and pony show, concocted by the White House press office to boost the president's poll numbers.

The solution to cutting unemployment is actually quite simple, and I think President Obama and his top advisors are well aware of it.

Based on the latest data from the U.S. Census Bureau, 98 percent of all U.S. firms have less than 100 employees. These small businesses are where most Americans work, and they are responsible for the majority of the nation's Gross Domestic Product (GDP). Most importantly, these small businesses are responsible for over 97 percent of all net new jobs in America. http://www.inc.com/news/articles/200708/data.html


Considering the fact that small businesses are responsible for over 97 percent of all net new jobs, how much of the economic stimulus funds would you allocate to small business if you were sincerely trying to cut unemployment and create jobs? 95 percent? 80 percent? At least 50 percent? The truth is that less than 1 percent of the $2.7 trillion in economic stimulus funds allocated by the Obama Administration have gone directly to small businesses. That is obviously why the unemployment rate has been virtually unaffected by the government's economic stimulus plans.

We don't have any more money to throw away on another ill-conceived economic stimulus package packed with pork and campaign paybacks. One of the simplest, most cost effective and efficient ways to stimulate the national economy is to redirect existing federal infrastructure spending to small businesses.

Guess what? We already have a 55-year-old law, a federal agency, and an extensive national network of federal employees to accomplish just that. It's called the Small Business Act, and it was passed in 1953. The Small Business Act requires that a minimum of 23 percent of the total value of all federal contracts be awarded to small businesses. That makes sense doesn't it? Since most American's work for a small business, and since small businesses create over 97 percent of all new jobs, let's give them a minimum of 23 percent of all federal contracts.

There's only one problem that needs to be addressed to boost our nation's failing economy and create millions of jobs coast-to-coast. Since 2003, twenty-five... that's TWENTY-FIVE federal investigations have found rampant fraud, abuse, loopholes and a flagrant lack of oversight by the Small Business Administration (SBA) and every other federal agency has allowed most federal small business contracts to wind up in the hands of Fortune 500 firms and some of the largest companies around the world. https://www.asbl.com/documentlibrary.html

In 2005, the SBA Office of Inspector General referred to the diversion of federal small business contracts to large businesses as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today." https://www.asbl.com/documents/05-15.pdf For five consecutive years the SBA OIG has named the diversion of federal small business contracts to large businesses as the #1 management challenge facing the agency. http://www.sba.gov/idc/groups/public/documents/sba_homepage/oig_reports_tmc_fy10.pdf

Why don't we kill three birds with one stone and finally stop the diversion of federal small business contracts to corporate giants? One, President Obama could keep his February 2008 campaign promise to, "end the diversion of federal small business contracts to corporate giants." Two, we could finally end a federal contracting scandal that has gone on for over a decade. Three, we could redirect up to $130 billion a year in current federal infrastructure spending to small businesses and the middle class economy. http://www.barackobama.com/2008/02/26/the_american_small_business_le.php

Here's the best part, I drafted a bill over two years ago that will accomplish all three of these goals. It's titled, H.R. 2568, the Fairness and Transparency in Contracting Act. In May of 2009, Congressman Hank Johnson (D-4-GA) introduced the bill, and to date it has 18 other cosponsors. H.R. 2568 is a simple bill. The Small Business Act defines a small business as a firm that is "independently owned," and it is this clause that excludes publicly traded firms from being considered a small business. H.R. 2568 is based on this clause and simply states that the federal government can no longer report awards to publicly traded firms as small business awards; a simple, free and easy solution.

The Obama Administration is claiming they have allocated $17.4 billion of the $785 billion American Recovery and Reinvestment Act (AARA) to small businesses.

H.R. 2568 would redirect over $100 billion a year, every year from now on, to the 27 million American small businesses that create over 97 percent of all net new jobs in America.

All President Obama needs to do to keep his campaign promise, halt billions of dollars a week in contracting fraud and abuse, redirect billions of dollars in existing federal infrastructure spending to middle class America and create millions of new jobs across the nation is to pass H.R. 2568.

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