Huffpost Business
The Blog

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

Lloyd Chapman Headshot

President Obama Needs to Make Good on His Promise to Invest in the Middle Class

Posted: Updated:
Print Article

Friday morning I was sitting at my breakfast table watching President Obama give a speech in Virginia. My ears perked up when he said, "we need to invest in small business." Of course, I'm used to hearing him say that. President Obama continually references the importance of small businesses and investing in small businesses to create jobs. I have to tell you -- it drives me out of my mind to keep hearing this.

Every day that he has been in office his administration has willfully and intentionally diverted millions of dollars in federal small business contracts to some of the biggest companies on earth.

Every year that President Obama has been in office the Small Business Administration Office of Inspector General (SBA OIG) has named the diversion of small business contracts to large corporations the top management challenge at the SBA.

I endorsed President Obama four years ago because he promised to end this problem. In fact, he released a statement saying, "It is time to end the diversion of federal small business contracts to corporate giants." Not only has he not made good on that campaign promise, his administration has made the problem worse.

One way he made it worse was by removing the parent company Dun & Bradstreet number from the Central Contractor Registration database. That was a critical piece of information that inspectors general from a variety of agencies were using to track companies that had misrepresented themselves as small businesses to illegally receive federal small business contracts. Doing this dramatically decreased transparency in federal contracting. Of course, the American Small Business League (ASBL) sued the Obama administration and won, forcing them to restore the data temporarily.

Some of the companies that have received small business contracts since President Obama took office include British Aerospace, Italian defense giant Finmeccanica, Lockheed Martin and Raytheon. The New York Times even reported on a Russian state-owned arms dealer called Rosoboronexport that won more than $370 million in federal small business contracts.

I can't believe the mainstream media has not given this story the attention it deserves. My guess is that liberal journalists won't talk about it because it will hurt President Obama's chances of being reelected, and conservative journalists won't talk about it because corporate giants in the defense and aerospace industry -- the beneficiaries of these rampant abuses -- fund Republican campaigns.

I think President Obama, Congress, the media and everyone else is missing the point. We're in the middle of one of the worst economic downturns in 80 years. U.S. Census Bureau data tells us that small businesses create more than 90 percent of all net new jobs. Federal law requires that small businesses receive a minimum of 23 percent of all federal contracts. To knowingly divert that money to large businesses that have created few, if any, net new jobs in recent years, that are shipping jobs overseas and that are not paying their fair share of taxes, is economic lunacy.

I know that a lot of people think I sound like a broken record, but this broken record is going to keep on playing until the government stops giving federal small business contracts to the biggest companies on the planet.