12/23/2011 12:56 pm ET Updated Feb 22, 2012

Obama to Approve a Series of Anti-Small Business Policies That Will Cheat the Middle Class out of Billions

The Obama administration has quietly adopted a series of anti-small business policies that will cost small businesses and minority-owned small businesses billions of dollars a month.

In the midst of the worst economic downturn in U.S. history, President Obama is abolishing the nation's oldest and most successful program to direct infrastructure spending to minority-owned small businesses, which could cost them between $25 and $50 billion a year. The President has continued to allow billions of dollars a month in federal small business contracts to be diverted into the hands of big businesses. His administration tried to cover up the diversion of federal small business contracts to corporate giants by destroying data in the Federal Procurement Data System such as the "small business flag" and the "parent DUNS number," that allowed watchdogs like myself, and the media, to monitor the actual recipients of federal small business contracts.

And now, President Obama will reauthorize a Department of Defense program known as the Comprehensive Subcontracting Plan Test Program (CSPTP) that makes it easier for prime contractors to cheat small businesses out of billions. Under the CSPTP, large defense contractors are exempt from reporting their subcontracting actions and also exempt from any penalty of non-compliance with congressionally mandated small business procurement goals.

The idea of the CSPTP is ludicrous.

Originally passed in 1990, the CSPTP is now a 21-year-old test program. Since it was established with the stated mission of increasing federal contracts for small businesses, the CSPTP has never been investigated for it's effectiveness, despite a demand from five members of Congress in October 2010 that the Government Accountability Office (GAO) investigate the program. "Federal contracting data calls into question whether ... participants in the CSPTP are actually meeting their small business subcontracting goals," the Representatives' letter to the GAO said.

The American Small Business League has long maintained that the CSPTP allows large defense contractors to circumvent the Small Business Act, which requires that 23 percent of all federal contracts must be with small businesses.

With his approval of the 2012 NDAA, President Obama is opting to allow the Pentagon to prevent disclosure of federal spending to the public, media and congress, as well as eliminate all penalties for contractors that defraud small businesses.

In October, SBA Inspector General Peggy Gustafson testified before the House Small Business Committee, confirming that the diversion of federal small business contracts to large corporations has been a top management challenge for the SBA and the entire federal government for the past seven consecutive years.

President Obama acknowledged the magnitude of the problem during his campaign in Feb. 2008, when he stated, "it is time to end the diversion of federal small business contracts to corporate giants."

Unfortunately, he has failed on that promise-- and every day of his administration the President quietly allows billions of dollars in federal funds that by law should be reserved for middle class firms to be diverted to some of the largest companies in the world.

The bottom line here is that in the U.S., small businesses equal jobs. Taxes, on the other hand do not create jobs. But for some reason, the mainstream media seems more concerned with the handful of pennies that the President and Congress are bickering over in payroll tax cuts than the billions of dollars that are diverted away from small businesses by the federal government every month.