Press Release

Obama's Justification for Closing the Small Business Administration Doesn't Add Up

September 25, 2013

ASBL President Lloyd Chapman issued the following:

Ronald Reagan tried to permanently close the Small Business Administration (SBA) during his administration. His plan to permanently close the SBA was to combine it with the Department of Commerce.

In November of 2008, I predicted President Obama would try and close the SBA by combining it with the Department of Commerce.

President Obama proved me right in January of 2012 when he announced his plan to close the SBA as Reagan tried, by combining it with the Department of Commerce. President Obama's sole excuse for essentially closing the SBA is to save a paltry, minuscule $300 million a year.

Lets put that into perspective. The current SBA budget is .001 percent of the Pentagon budget. The SBA's annual budget is approximately $700 million while the Pentagon budget is $700 billion.

The Pentagon's own auditors found 25 percent of the Pentagon's expenditures could not be accounted for.

That means, Monday through Friday, 8 a.m. to 5 p.m., the Pentagon loses $87 million an hour. The Pentagon loses more money every day, before lunch than President Obama claims will be saved by essentially closing the SBA by combining it with the Department of Commerce.

That means the Pentagon loses enough money every day to run the SBA for a full year.

President Obama's claim that $300 million a year can be saved by closing the SBA is ludicrous and absurd, so what's the real reason?

Every year of the Obama Administration, the SBA Inspector General, Peg Gustafson, who was appointed by President Obama, has named the diversion of federal small business contracts to corporate giants as the number one problem at the SBA.

Information from the SBA indicates that last year, 235 Fortune 500 firms received federal small business contracts. A series of federal investigations and investigative reports have all found rampant fraud at the SBA and every year billions of dollars in federal small business contracts have been diverted to Fortune 500 firms.

The Government Accountability Office investigated a SBA managed program and released Report 10-108. It stated, "By failing to hold firms accountable, the SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud."

I don't think President Obama wants to close the SBA to save a minuscule, infinitesimal $300 million a year. I think he wants to close the SBA to obscure the rampant fraud and abuse that has been uncovered at the SBA during Karen Mills' tenure as administrator.

It certainly doesn't make sense to close the SBA to save $300 million a year when the Pentagon loses more than that every day before lunch, now does it?

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