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Small Business Administration Faces Sweeping Changes Under Obama Plan

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The Small Business Administration faces big changes after President Obama announced new consolidation plans Friday.
The Small Business Administration faces big changes after President Obama announced new consolidation plans Friday.

The Small Business Administration will be consolidated into a larger general agency, as part of a new Obama administration plan announced Friday.

The move would combine the SBA with five other government offices -- the Department of Commerce's core business and trade functions, the Office of the U.S. Trade Representative (USTAR), the Export-Import Bank (Ex-Im Bank), the Overseas Private Investment Corporation (OPIC) and the Trade and Development Agency (USTDA) -- to form a single agency. The Washington Post estimates the changes will eliminate an estimated 1,000 jobs and save $3 billion over 10 years. While the SBA would no longer be a standalone agency, the SBA administrator position is expected to be elevated to cabinet level, as it was under the Clinton administration.

"The government we have is not the government we need," Obama said. "It’s redundant and inefficient. With the authority I am requesting today, we could consolidate them all into one department."

According to a White House statement, this department will be "where entrepreneurs can go from the day they come up with an idea and need a patent, to the day they start building a product and need a warehouse, to the day they are ready to export and need help breaking into new markets overseas. The new Department will lead the development and implementation of an integrated, strategic, government-wide trade effort and have a focused capacity to help businesses grow and thrive."

Todd McCracken, president and CEO of National Small Business Association, responded in a statement, "While NSBA is firmly committed to reducing the deficit, there simply aren't enough details available yet to know if this will be a net win or loss for small business. 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. 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.

"Any proposal to consolidate agencies must ensure that SBA, Ex-Im Bank, OPIC, USTR and USTDA remain thriving vehicles for the U.S. to promote entrepreneurship," McCracken added. "Anything short of that would be a disservice to America's small businesses and the U.S. economy."

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