Dear President Obama, Why Are You Cheating Small Businesses?

Do these companies sound like small businesses to you? Halliburton, Rolls-Royce, Wal-Mart, Home Depot, John Deere, Dell Computer, Xerox, Sherwin-Williams, and British Aerospace (BAE). How about Buhrmann NV in Amsterdam with 26,000 employees worldwide?

These are just a few of the thousands of corporate giants from around the world that your administration is giving billions of dollars a month in government small business contracts to.

Since 2003, there have been over a dozen federal investigations that found Fortune 500 firms and thousands of large businesses are receiving government small business contracts. The Small Business Administration (SBA) Office of Inspector General described the magnitude of this problem very eloquently in report 5-15. The report states, "One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards."

When you were running for president, you seemed to understand the staggering negative impact this problem was having on our economy.

Let me remind you of what you said during the campaign, "98 percent of all American companies have fewer than 100 employees. Over half of all Americans work for a small business. Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants."

You were absolutely right, small businesses are the backbone of our nation's economy. In fact, according to the latest statistics from the U.S. Census Bureau, small businesses with less than 100 employees create over 97 percent of all new jobs in America.

Nobel Prize winning economist Paul Krugman said your economic policies are almost certain to fail, and they are, "more than disappointing. In fact, it fills me with a sense of despair." Ditto for me.

Allowing Fortune 500 firms to participate in economic stimulus programs for small businesses, especially during a recession, is absolutely moronic and asinine. How in the world do you expect to create jobs and stimulate the economy if you won't even stop the diversion of billions of dollars in federal small business contracts away from the middle class firms that create 97 percent of all new jobs in this country?

Here is my suggestion, why don't you do what you said you would do during the campaign and stop giving federal small business contracts to "corporate giants"? I even have a way you can accomplish that at no additional cost to the taxpayers. I have written legislation titled the "Fairness and Transparency in Contracting Act." It is based on one of the most foundational principals of the original Small Business Act of 1953, which states that a small business must be "independently owned." My lawyers all tell me that would clearly exclude publicly traded firms. The Fairness and Transparency in Contracting Act simply says, the federal government can no longer report awards to publicly traded companies and their subsidiaries as small business awards. Tah Dah, no more small business contracts going to "corporate giants."

Your economic stimulus plan calls for $111 billion in infrastructure spending this year. My guess is about 90 percent of that money will go to big businesses. I don't know if anyone has told you this, but big businesses in America have not created one net new job since 1977.

With my plan, you simply stop giving government SMALL BUSINESS CONTRACTS on existing infrastructure spending to "CORPORATE GIANTS." I have won several Freedom of Information Act cases against the government and I have tons of data that indicates around $100 billion a year in federal small business contracts are being diverted to big businesses. Ask Paul Krugman, or one of your top economic advisors like Dr. Laura Tyson, if you can create any new jobs and stimulate the national economy by redirecting $100 billion a year in current federal infrastructure spending to the middle class firms that create over 97 percent of all new jobs in America.

$100 billion a year, year-after-year, redirected to the American small businesses that create 97 percent of all new jobs, using the original congressional intent of a 55-year-old economic stimulus program called the Small Business Act. Did I mention that it's free to the taxpayers? What's not to love?

P.S. How about a quick executive order, and we can get this economy back on track pronto?

Sincerely,
Lloyd Chapman
President, American Small Business League

Comments

[jeff5128]

Ultimately it does seem like small business is excluded because we lack the strong lobby like unions, auto companies and other large companies.

I was extremely disappointed with the stimulus plan to see money going to capital projects that would benefit few geographic areas and a specific industry segment - engineering and construction.

It seems like the government could have received much more bang for the buck by adding payroll tax reductions or headcount increase incentives for small businesses to achieve an employment boost that would be across all geographic areas and all types of industries and create real growth.

What a waste... small business overlooked again!

[Read2know]

President Obama has turned his back on small busineses and has instead embraced Corporate Giants. The only way this economy will get turned around is to involve small businesses. That is where America's jobs are created.

[julane]

I am so so disappointed in President Obama. I sincerely believed he was going to do all the things he promised during the campaign. It has become painfully clear he has no intention of honoring his campaign promises. I would never vote for him again and I imagine millions of American feel the same way. The fact that he is allowing government small business contracts to be taken from middle class firms is a prime example of who this man really is. Kudos to Lloyd Chapman for not being afraid to call Obama out on this issue.

[SBBeliever]

AMEN, BROTHER! Geez oh, I voted for Obama and I'm SOOOOO disappointed in how he's handling this. What's the deal?! Here's a way to stimulate the economy, and it' s "FREE" and easy! Just utilize an existing law (the Small Business Act)!!! I'm so sick of seeing MY MONEY go to LARGE CORPORATE FAT CATS. Don't people get it? Obviously President Obama doesn't. And here I thought he was working for me, the middle class. President Obama you are proving you are just like the rest of them and in it for corporate America. Very disheartening and discouraging

[THEFINGMAN]

Bravo, well put Lloyd! The facts are there, the idea is very relevant, what is left to do? Oh yeah, we need the easily swayed, wanting to do everything for everyone president Obama to knuckle up and do something. What are you afraid of Obama? As Lloyd mentioned this cannot and will not effect the American economy in a negative way, it will only inspire and bring back employment opportunties to the well deserved middle class. The American public is well aware of big businesses receiving federal contracts earmarked for small businesses, we all know. A simple case of the haves and have nots. The haves "have" money to fill politicians pockets pushing them towards situations that benefit their already deep pockets. Who is looking out for the middle class? THAT WAS SUPPOSED TO BE YOU OBAMA! Good luck getting re-elected for another term if you do not address this issue with haste.

[truthtimeisnow]

It's interesting, small businesses are like second class citizens in the eyes of the government. I wonder if legislators really realize the dramatic impact small businesses have on the American economy. Based on their actions, I would say...NO.

[Janet1015]

As someone working for a small business that keeps being screwed over by these large companies, it is so nice to see that at least someone is trying to help us. This problem of large firms walking all over the little guy and getting away with it year after year has to stop. I hope President Obama is paying attention, if he really wants to help turn the economy around then he needs to do something about this.

[kevlar0076]

When? When will it be small businesses' time? When will the DC crowd wake up and realize they are destroying the most vibrant and viable part of our economy? When will a politician actually follow through on a promise? Here is my idea, since it seems that big business can spend the money to contribute to campaigns, which seems to get them favorable legislation and policies, I think the small business community needs to start pooling our resources so we can save up to buy our own members of Congress, or perhaps if we raise enough money, our own congressional committee. Hell, I thought the venture capitalists liked helping small businesses, which I found out the hard way is not always the case, but they own the chair of the House small business committee, and most of the other members, so we need to counter their efforts and buy our legislators back. Who's with me?

[truthtimeisnow]

Seems reasonable...

[Phucket]

Now that sounds like a plan. How does the old saying go - "if you can't beat 'em, buy your own congresspeople."