THE BLOG

What Does Washington Have Against Small Businesses?

08/08/2012 10:10 am ET | Updated Oct 08, 2012

It drives me crazy to watch the parade of politicians on mainstream media talking about the economy, job creation and small businesses. It's almost unheard of for any of them to mention the fact that small businesses create the overwhelming majority of net new jobs. According to stats from the U.S. Census Bureau, the Department of Labor and research from the Kauffman Foundation, it is irrefutable that small businesses create the overwhelming majority of net new jobs in America.

This fact seems to be completely unknown to the White House and Congress. Even though the nation's 28 million small businesses are our nation's chief job creators, they have received only a minuscule portion of the stimulus funds under the Obama administration. To add insult to injury, federal law mandates that a minimum of 23 percent of the total value of all federal contract dollars be awarded to small businesses. Unfortunately since 2003, a series of federal investigations have found that the vast majority of federal contracts earmarked for small businesses have gone to large businesses in the U.S. and Europe.

Investigations by ABC, NBC and CBS have all found that firms such as Oracle, Hewlett Packard, IBM, Raytheon, Lockheed Martin, Boeing, Finmeccanica, Rolls Royce and British Aerospace have all together received billions in federal small business contracts over the last few years.

The American Small Business League (ASBL) estimates that small businesses actually are receiving far less than 10 percent of the total value of all prime contracts.

Last week we saw that unemployment jumped, which I think is a matter of you can't get there from here -- meaning, If the government keeps trying to create jobs with tax cuts and aiming stimulus efforts toward large businesses and banks, unemployment will remain high. Someone needs to tell President Obama and Congress to take a look at the data that indicates that small businesses are the nation's chief job creators, not Fortune 1000 firms.

If President Obama were serious about creating jobs, I think he would start by keeping his campaign promise from February 2008 when he said, "It's time to end the diversion of federal small business contracts to corporate giants." He could do that today by issuing a one sentence executive order. Or he could adopt the bill that I wrote titled the Fairness and Transparency in Contracting Act. Either one of those measures would create more jobs than anything he or President Bush ever thought of.