The American Small Business League (ASBL) released the following press release today.
Petaluma, Calif. - President-elect Barack Obama and the new 111th Congress will soon be rolling-out an economic stimulus plan. The stimulus package will no doubt cost taxpayers hundreds of billions of dollars, and there is no guarantee it will achieve it's goal of rescuing most Americans from the failing economy.
One free, easy and guaranteed method to stimulate the U.S. economy is to channel federal infrastructure funds to our nation's nearly 27 million small businesses. U.S. Census Bureau statistics show 98 percent of all U.S. firms have less than 100 employees. These firms create over 85 percent of all new jobs and employ over 56 percent of all private sector workers.
So far President-elect Obama has completely ignored this simple, quick and cost effective method of stimulating the national economy.
In a recent appearance on CNN's Late Edition with Wolf Blitzer, two of America's top economic experts, Laura Tyson and Carly Fiorina agreed that directing federal infrastructure funds to small businesses was a foolproof and easy way to create millions of jobs and immediately boost the failing economy. Tyson is the former Chair of the U.S. President's Council of Economic Advisers during the Clinton Administration and is currently an economic adviser to President-elect Barack Obama. Fiorina is the former CEO of Hewlett-Packard and McCain campaign economic advisor.
This method of stimulating the nation's failing economy would be virtually free to taxpayers and would have an immediate positive effect on the economy. It could be implemented immediately, because it would be based on existing federal programs designed to direct federal funds to small businesses. The Small Business Reauthorization Act of 1997 stipulates that a minimum of 23 percent of all federal prime and sub-contracts be awarded to small businesses.
Since 2002, over a dozen federal investigations have found fraud, abuse, loopholes, and a blatant lack of oversight by federal officials, which have allowed billions of dollars in federal contracts earmarked for small businesses to wind-up in the hands of Fortune 500 firms. Additionally, ABC, CBS and CNN, along with most of the nation's largest newspapers have reported the dramatic abuses in these programs.
It has been estimated that as much as $100 billion a year in federal small business contracts are diverted to Fortune 500 firms and other large businesses. If these funds were redirected to the middle class economy as Congress originally intended with the passage of the Small Business Act of 1953, there would be a significant, undeniable and immediate impact on the national economy.
If President-elect Obama is searching for the most cost effective and immediate way to stimulate America's faltering economy, legislation to direct federal infrastructure funds to America's small businesses should be implemented as soon as possible.