With President Obama's recent proposal to consolidate six federal trade and commerce departments, small businesses finally have a seat on the president's cabinet -- for now.
Unfortunately, Small Business Administration (SBA) Administrator Karen Mills' appointment to cabinet-level membership is obviously nothing more than a temporary political ploy by Obama to distract the public, Congress and the media from the fact that his administration is winding down all federal programs for small businesses owned by women, minorities and veterans.
Ms. Mills will remain on the president's cabinet only as long as the SBA is an agency-- and the announcement of Ms. Mill's elevation to the cabinet was precluded by a proposal to collapse the SBA and five other federal agencies into one.
Which should show you how important small businesses are to President Obama: not very.
Without doubt, the lobbying power of the defense and aerospace industry, along with Republican zeal to downsize the federal government, will ensure that President Obama's proposed merger of these six federal trade and commerce departments passes with flying colors within a matter of months, rendering any position within the SBA moot because the agency will no longer exist.
Still, small business advocates are hoping that Ms. Mills takes this rare privilege of SBA cabinet membership (the first time the agency has had representation on the presidential cabinet since before President Bush) and uses her position to ask the President how winding down federal small business contracting programs serves the American people.
Unfortunately, there's very little likelihood that Ms. Mills has any intention of doing that; a venture capitalist and the heiress to the Tootsie Roll company, Ms. Mills is out of touch with small business owners and has never shown much commitment to aiding the very businesses her agency is supposed to protect. Research from the American Small Business League (ASBL) shows that 60 of the top 100 federal small business contractors listed by the SBA for fiscal year (FY) 2010 were actually some of the largest corporations in the world, fraudulently receiving hundreds of billions of dollars in federal small business contracts.
Within a matter of months, if Obama's proposed merger is successful, small businesses will once again be unrepresented on the president's cabinet, and even worse-- they will no longer have a federal agency to assist them.
In the midst of the worst economic downturn in 30 years, this is the very last thing our nation needs.
According to the latest Census Bureau data, America's 28 million small businesses annually create 90 percent of all net new jobs, produce half the GDP, employ over 50 percent of the private sector workforce, and account for over 90 percent of U.S. exports.
Republicans have been trying for decades to close the SBA under their banner of 'smaller government.' However, small business advocacy groups argue that the SBA-- one of the smallest federal agencies in Washington, with a budget of less than $1 billion annually-- is not the right agency to cut.
The proposed merger of the SBA, Dept. of Commerce and four other federal agencies is projected by the Obama Administration to save $3 billion over the next decade by cutting between 1,000 and 2,000 federal employees from the six soon-to-be-consolidated agencies. But at what cost?
When compared with total federal spending, $3 billion in savings over 10 years is just a drop in the ocean: if the Pentagon was to reduce it's spending by .05 percent over the next decade, that would also save $3 billion dollars.
Instead, by consolidating these miniscule federal agencies for a measly $300 million a year in savings, the Obama administration is choosing to wind down the only federal agency that was created by Congress to ensure that small businesses receive their fair share of federal contracts.
SBA Administrator Mills should ask the President some tough questions while she still holds her seat on the cabinet. After all, when the SBA is closed, she'll be out of a job.