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Lloyd Chapman

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Small Business Administration Closure Plan Will Be Deceptive and Devastating

Posted: 09/18/2013 10:08 pm

I predicted President Obama would try and close the Small Business Administration (SBA) by combining it with the Department of Commerce in November of 2008. He proved me right in January of 2012 when he announced his plan to do exactly that.

When Ronald Reagan was very clear he wanted to permanently CLOSE the SBA his plan was to combine it with the Department of Commerce. Combining agencies, particularly with the Department of Commerce, is an old Washington trick to close an agency without having to deal with public backlash.

President Obama said the federal government could save $300 million a year by combing the SBA with the Department of Commerce. He never gave any details on how that would be achieved. $300 million to the federal budget is like the change in your car compared to your over all net worth. $300 million a year to the federal budget is statistically insignificant. Let's put things into perspective. The SBA budget is about $800 million or .001 percent of the Pentagon's $800 billion budget.

One retired Pentagon official stated you "could find $48 billion in loose change in that building..."

The Pentagon's own auditors have found the Pentagon cannot account for up to 25 percent of their expenditures. That's in the neighborhood of $200 BILLION a year. On the day before 9/11, Secretary of Defense Donald Rumsfeld announced over $2.3 TRILLION in Pentagon spending could not be accounted for.

So, if President Obama's excuse of closing the SBA to save the taxpayers a paltry $300 million doesn't make sense, then why does he want to close it?

In February of 2008 President Obama stated, "It is time to end the diversion of federal small business contracts to corporate giants." Smart man, that's exactly what I have been saying since 2002 when I testified before the House Small Business Committee.

Every year of the Obama administration, the Obama-appointed SBA Inspector General Peg Gustafson has named the diversion of federal small business contracts to large businesses as the most rampant problem at the SBA.

Beginning in 2005 with Report 5-15, the SBA Inspector General has described the diversion of billions of dollars a year in federal small business contracts to corporate giants around the world as, "One of the most important challenges facing the SBA and the entire federal government today..."

The rampant fraud at the SBA has been documented by a long series of federal investigations. Most major news channels have released investigative reports that found "wide spread fraud in federal programs designed to help small businesses."

ABC, CBS, NBC and CNN have all covered the story. In July the Washington Post released an investigative story that found the SBA had cheated small businesses out of billions of dollars through supposed "errors and exclusions."

The real reason President Obama, many members of Congress, the Pentagon and other federal agencies really want to CLOSE the SBA is to cover up the rampant fraud and abuse that has been uncovered at the agency for over a decade.

The real motivation behind closing the SBA is very simple to understand, GREED. Federal law requires a minimum of 23 percent of all federal contracts be awarded to small businesses. The Fortune 500 firms that run our government want every cent the federal government spends to go into their pockets.

The real goal here for corrupt politicians and the greedy corporate giants that fund their campaigns is to CLOSE the SBA and quietly eliminate the 23 percent federal contracting goal. That way they can control 100 percent of all federal spending.

It's certainly not to "streamline government" or save a measly $300 million a year.

Let's close with some more facts. According to the U.S. Census Bureau, small businesses are responsible for over 90 percent of all net new jobs, over 50 percent of the private sector work force, over 50 percent of the GDP and over 90 percent of all U.S. exporters. The Small Business Act that requires a minimum of 23 percent of all federal contracts be awarded to middle class small businesses is the largest, most efficient and effective economic stimulus programs in U.S. history.

CLOSING the SBA under the guise of combing it with the Department of Commerce will, without question, lead to the eventual elimination of all federal programs to assist the 28 million small businesses that create over 90 percent of the nation's net new jobs.

Does it make sense to you to combine the agency that is supposed to help the nation's small businesses with the same agency that represents the nation's largest corporate giants? Combining the SBA and the Department of Commerce would be like combining NASA and the Department of the Interior. The Department of Commerce represents the very corporate giants that have been hijacking federal small business contracts for over a decade.

The elimination of the SBA and the nation's largest economic stimulus program for small businesses will devastate the middle class economy. Millions of small businesses across America will be negatively impacted and millions of jobs will be lost.

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