Huffpost Business
The Blog

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Lloyd Chapman Headshot

Commerce Department & SBA Merger Could Cost Small Business Billions

Posted: Updated:

On November 10, the Obama Administration's National Commission on Fiscal Responsibility and Reform shocked the small business community with the preliminary recommendation that the Small Business Administration (SBA) be absorbed by the U.S. Department of Commerce. The recommendation came as part of a plan that would cut federal spending by $200 billion through 2015.

The Small Business Administration (SBA) is the only federal agency to assist America's chief job creators, its 27 million small businesses. According to the U.S. Census Bureau, small businesses are responsible for more than 90 percent of all net new jobs, 50.2 percent of the non-farm private sector workforce, 50 percent of the gross domestic product (GDP) and 90 percent of exports and innovations.

As early as November 2008, American Small Business League (ASBL) President Lloyd Chapman predicted that the Obama Administration would attempt to close the SBA by merging it with the Commerce Department. "Based upon the extremely low priority that Obama has placed upon small business issues, it would not surprise me if he tried to completely close the Small Business Administration by combining it with the United States Department of Commerce," Chapman stated.

According to the commission chairs, combining the SBA with the Commerce Department, and shaving its combined budget by 10 percent would save a paltry $1 billion by 2015. However, the ASBL maintains that any savings resulting from a merger would be minuscule and fiscally insignificant in comparison to the staggering damage it would do to the middle class. The savings are especially insignificant when compared to $23 billion in Iraq contracts reported as, "Lost, Stolen, or unaccounted for," by the BBC in 2008.

Trying to save money by combining the SBA with the U.S. Department of Commerce is laughable. Not only would combining the SBA with the Department of Commerce save a minuscule amount of money, but it would also do irreparable damage to the nation's middle class economy. I have been predicting that the Obama Administration would try to do this for a long time. This is not a move to save money. This is a move to try to allow large corporations to keep billions in federal small business contracts. Here we are in the worst economic downturn in 80 years. We should be doing everything we can to help small businesses, not destroy the one federal agency designed to help them.