Small business group says SBA moving closer to abolition

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Small business group says SBA moving closer to abolition

Central Valley Business Times
March 30, 2006

An April 6 hearing called by U.S. Sen. Tom Coburn, R-Okla., is one of the precursors to eliminating the Small Business Administration, says a California small business advocate.

The hearing will be biased toward elimination of the SBA because of the witnesses on its agenda, says Lloyd Chapman, president of the Petaluma-based American Small Business League.

A key witness scheduled to testify is Veronique de Rugy of the American Enterprise Institute, Mr. Chapman says.

Ms. de Rugy has advocated abolishing the SBA, contending that common beliefs about small business are wrong. She says when it comes to jobs, the greatest job creation comes when small companies become big companies.

And in a December 2005 interview with BusinessWeek Online, she reaffirmed her call to kill the SBA, saying it "does a lot of damage."

But Mr. Chapman says the real reason to kill the SBA is for big business, especially defense contractors, to get the estimated $119 billion in government contracts now earmarked for small business.

In the BusinessWeek interview Ms. de Rugy also noted she has called for an end to subsidies to big business as well.

For his part, Mr. Coburn says the April 6 hearing will simply examine the effectiveness of the SBA.

He says his office "has received indications that officials from the SBA itself may be engaging in lobbying activities against this hearing," in a press release Thursday afternoon.

"It is absurd to suggest that I have a hidden agenda to harm small business," Mr. Coburn says in a statement. "I've never met a small business owner who believes any aspect of the federal government is operating at peak efficiency and should be immune from examination. If the ASBL believes the SBA represents the pinnacle of economic perfection and efficiency and is beyond scrutiny, then they should be confident that their perspective will be vindicated during this hearing."




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