Obama Dropped Small Business Stimulus Plan Days Before the Election

Just days before the election, President Barack Obama dropped a comprehensive plan to stimulate the middle class economy by stopping the diversion of federal small business contracts to corporate giants. The plan was drafted over the course of three months by dozens of small business experts around the country who had been invited to serve on President Obama's small business advisory panel.

The plan included a number of policies that would have redirected up to $100 billion a year in federal small business contracts back to legitimate middle class firms around the country.

Since 2003, a series of over 15 federal investigations found Bush Administration officials allowed billions of dollars in federal small business contracts to be diverted to Fortune 500 firms, their subsidiaries and thousands of large businesses in the United States and Europe.

A report issued by the Small Business Administration (SBA) Office of Inspector General (OIG) referred to the diversion of federal small business contracts to large businesses as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today."

President Obama responded to the investigations in February of 2008 with the statement, "It is time to end the diversion of federal small business contracts to corporate giants."

The plan included support for a new piece of draft legislation written by the American Small Business League (ASBL) titled the Fairness and Transparency in Contracting Act. The new legislation would prevent government contracting officials from awarding small business contracts to Fortune 500 firms and other large businesses. The ASBL estimates the new legislation would provide a dramatic boost to the nation's failing economy by redirecting up to $100 billion a year in federal infrastructure funds to middle class firms.

As opposed to other stimulus plans that could cost taxpayers hundreds of billions of dollars, the Fairness and Transparency in Contracting Act would be virtually free to taxpayers.

In December President Obama's transition team stated that up to 40,000 jobs could be created with every billion dollars spent on federal infrastructure projects. If calculations by President Obama and the ASBL are correct, the Fairness and Transparency in Contracting Act could create over 4 million new jobs at virtually no expense to taxpayers.

Comments

[dadw5boys]

Obama has not dropped anything he is only dealing Bush's mess right now.

Obama wants small business to get loans and he won't forget.

[americaforme]

This is a wonderful turn around, it closes the door on fortune 500's Co. getting small business loans. It gives the real small business folks the opportunity to get ahead. Qualifying is the door to these loans. At last some wisdom coming through.

[SpiritHorse]

We need more information about this - transparency and all that. On face value, this appears to be a bad sign for small business and the middle class in this country - what's left of it, anyway. If they haven't provided an explanation of why they did this, it's time for some direct, to the point, no nonsense questions. What's the reasoning and what will the Obama team offer as an alternative?

[unrepentantlib]

I'm confused. What do you mean by "dropped"? The piece makes it sound like the plan is going forward. Is it? Or did Obama reneg? A little clarity, please.

[markhughw]

I could not uncover the reason why Obama did this in the article. Doesn't seem to make sense.