Middle Class Bailout Bill That Can Rescue The Economy Was Passed In 1953
In Tuesday's Presidential debate, Senator Barack Obama (D - IL) called for a bailout bill for the middle class. Yesterday, Senator Obama said he would also make sure that tax dollars are spent wisely. Today, there exists a great piece of legislation that would accomplish both of Senator Obama's goals. It would infuse billions of tax dollars back into the firms where most Americans work, create thousands of new jobs and help middle class families pay for their healthcare and mortgages.
It's called the Small Business Act, and it became law in 1953. Today, based on the original Small Business Act, the federal government is supposed to insure that a minimum of 23 percent of the total value of all federal contracts and subcontracts are awarded to small businesses. Twenty-three percent of the federal government's total acquisition budget amounts to roughly $150 billion a year in federal contracts and subcontracts that should by law go to the middle class small businesses where approximately 56 percent of our nation's population is employed.
What better place to spend tax dollars than with the 27 million small businesses where most Americans work, and where most of our nation's tax revenue is generated?
The Small Business Act is the perfect vehicle to rescue our nation's middle class economy, and boost the segments of the American economy that were completely ignored by the $700 billion Wall Street bailout bill.
There are a couple of hurdles that need to be addressed before the Small Business Act can help lead our nation out of one of the worst economic disasters in modern history. First, since 2003, 15 federal investigations have found that Fortune 500 firms are the actual recipients of most federal small business contracts. It has been estimated that large businesses receive over $100 billion a year in federal small business contracts. ABC, CBS and CNN have all aired investigative reports which have found firms like: Rolls Royce, Wal-Mart, Microsoft, Raytheon, IBM, Xerox, Dell, John Deere, General Dynamics, GTSI, Home Depot, Titan Industries, Hewlett Packard, Battelle and British Aerospace Engineering (BAE) have all received millions of dollars in federal small business contracts.
Second, the Bush Administration has systematically dismantled virtually every single federal program the Small Business Act established to help small businesses, woman-owned firms, minority-owned firms and veteran-owned firms. The Small Business Act established the Small Business Administration (SBA), and during the past eight years President Bush has cut that agency's budget more than any other agency. Today, the SBA budget is less than half of what it was when President Bush took office.
Neither Barack Obama, nor John McCain have even mentioned any aspect of the Small Business Act in their small business plans. Neither candidate has pledged to restore the SBA's budget and staffing. Most surprising is that neither Obama, nor McCain have proposed any specific solutions to the diversion of up to $100 billion a year in government contracts that by law should be going to our nation's middle class, but instead are being diverted to Fortune 500 firms. Senator Obama even seems to be trying to distance himself from a statement he made in February of 2008, "It is time to end the diversion of federal small business contracts to corporate giants." I would guess that he received a call from the "corporate giants" the following day regarding some new fund raising ideas.
Senator Obama was right though; we definitely need a bailout bill for the middle class. The good news is it was passed in 1953. If Senator Obama and Senator McCain are serious about helping middle class families pay their health care and their mortgages, it's going to take more than just campaign rhetoric and pandering.
America's middle class deserves some help from the government in these difficult economic times, and the Small Business Act is a free and easy solution. It's time to fully implement the Small Business Act and restore the budget and staffing of the only federal agency established to assist America's 27 million small businesses, the SBA. It's also time to stop the diversion of federal small business contracts to corporate giants and get that money back into the hands of the small businesses that are the heart and soul of this nation's economy.