McCain Small Business Plan Ignores Major Small Business Issues

09/07/2008 05:12 am ET | Updated May 25, 2011

On Monday, Senator John McCain's (R - AZ) presidential campaign issued a press release entitled, "John McCain's Plan To Help Small Business." The plan proposes tax cuts that will help Fortune 500 corporations more than small businesses. In fact, his plans to help small businesses coping with the rising cost of fuel seem more like a wish list for the oil and gas industry lobby than a real plan to help small business owners.

Outside of provisions designed to provide Fortune 500 corporations with tax cuts, Senator McCain's small business plan ignores several of the most significant problems facing small businesses.

Senator McCain's plan makes no mention of restoring of the Small Business Administrations budget and staffing to pre-Bush Administration levels. Since 2001, President Bush has cut the SBA's budget and staffing more than any other federal agency. Today, the SBA's budget and staff are approximately half of what they were when President Bush took office. The SBA is the only federal agency specifically chartered with assisting America's 27 million small businesses.

As a result of cutbacks at the SBA, a multitude of federal contracting and loan programs to assist woman-owned firms, minority owned firms veteran-owned firms and small businesses in general have been severely damaged. With Bush Administration cutbacks in mind, small business advocates are concerned President Bush may still attempt to close the SBA by combining it with the Commerce Department. Any realistic plan to assist America's 27 million small businesses should include a framework for putting the SBA back on track.

In 2000, Congress passed legislation establishing a 5 percent set-aside program for woman-owned small business. During its tenure, The Bush Administration has refused to implement the program. The Bush Administration even ignored a federal court order directing them to implement the program. Although Senator Obama has indicated his administration would implement the program, Senator McCain's small business plan makes no mention of his intention to finally launch the program.

Since 2003, more than a dozen federal investigations have all found Fortune 500 firms were the actual recipients of billions of dollars in federal small business contracts. In July of this year alone, three separate federal investigations were released, which found widespread fraud and abuse in federal small business contracting programs. The Department of the Interior Office of Inspector General sampled just three tenths of one percent of DOI's contracts and found millions in small business contracts had actually gone to firms such as Dell, Sherwin-Williams, Xerox and John Deere.

Several of the Fortune 500 corporations used by the DOI to inflate its and the federal governments small business procurement goals are listed in the government's Central Contractor Registration (CCR) database as small businesses, according to the DOI IG report. The inclusion of Fortune 500 corporations in the CCR database suggests that every federal agency and prime contractor is actively using the database and reporting awards to those firms as small business awards.

In its history, the American Small Business League (ASBL) has won five legal battles against the Bush Administration. As a result of its efforts, the ASBL has been successful in forcing the release of thousands of pages of data proving that Fortune 500 firms and even many of the largest corporations in Europe have received hundreds of billions of dollars in small business contracts during the Bush Administration. The ASBL estimates that every day, up to $400 million in federal small business contracts are diverted to many of the largest firms in the United States and Europe. In Report 5-15, the SBA Office of Inspector General described the diversion of federal small business contracts to large businesses as one of the biggest challenges facing the federal government today. Senator McCain's small business plan made no mention of his plan to stop the diversion of up to 100 billion a year in government small business contracts to Fortune 500 firms and other large businesses.

In February of this year Senator Obama released his statement on the issue, "Its time to stop the diversion of federal small business contracts to corporate giants," he said.