Optimism about economic growth in 2012 is fading, which is a bad sign for President Obama, as his reelection hinges on whether or not more jobs are created between now and November. The facts are that the economy is slowing, U.S. firms are not creating the jobs at a rate we hoped and the president hasn't done anything to fix it.
My reaction to this is the same as it always is. There are common sense cures for the economy, so why aren't we doing more? And by more, I mean feeding the massive chunk of the economy that creates all the jobs.
The U.S. Census Bureau data tells us that small businesses are responsible for more than 90 percent of all net new jobs. The lowest number of net new jobs created by small businesses ever reported is 65 percent. But the Kauffman Foundation found that small businesses have responsible for 100 percent of all net new jobs since 1980. That tells me that Fortune 500 firms have not created a single net new job in more than 30 years.
We also know from government data that small businesses are responsible for more than half the GDP, half the private sector workforce and more than 90 percent of U.S. exports.
Small businesses make up about 99 percent of U.S. companies but are only legally required to receive about a quarter of the government's acquisitions budget. But the U.S. government spends more annually than any other customer on the planet. The one thing the president hasn't tried in terms of helping the economy is to stop give federal small business contracts to Fortune 500 firms. It sounds absurd but it's true. Fortune 500 firms and other large businesses win billions of contracts earmarked for our chief job creators every year. You can call it simple mistakes, bad policy, human error, computer glitches, but I call it corruption, fraud and abuse, and that's what is destroying our economy.
In 2002, I began contacting Congress and the GAO about this problem and convinced the GAO to launch an investigation based on information I provided. In that investigation, the first-ever analysis of the problem, they found more than 5,000 large businesses receiving federal small business contracts.
Since 2003 a series of more than a dozen federal investigations uncovered billions of dollars in federal small business contracts being diverted to Fortune 500 firms and some of the biggest companies around the world. The problem has now gone on for more than a decade, but the solution is actually quite simple.
I wrote a simple bill called the Fairness and Transparency in Contracting Act. The Small Business Act defines a small business as one that is independently owned. My lawyers tell me that means many things but that the most basic thing it means is that if you're publicly traded, you're not independently owned. Meaning, there is no such thing as a publicly traded small business. So the heart of my bill is one line, which states the federal government will no longer report awards to publicly traded companies as small business awards. No new taxes, no new spending. It's simply directs existing federal infrastructure spending to our nation's chief job creators.
It will solve a 10-year federal contracting scandal and even will allow President Obama to keep a campaign promise he made in February 2008 when he said, "It's time to end the diversion of federal small business contracts to corporate giants." Most of all, ending this corruption, fraud and abuse of federal small business contracting will save the economy and if done before November, save President Obama's reelection. All the money and all the ads in the world can't convince the 14 million unemployed people that the president's economic policies are working. Something has to change.
So I just want to be clear on one thing. When President Obama speaks about how hard he's working to create jobs and then Ben Bernanke talks about how to save the economy, realize that President Obama knows and Ben Bernanke knows that small businesses create all the net new jobs in America. They also know that every day the Obama administration diverts hundreds of millions of dollars in federal funds that by law should be going to small businesses to some of the biggest companies on the planet.
The most efficient affective economic stimulus program right now would be to pass the Fairness and Transparency in Contracting Act. Just simply stop agencies from violating federal law in giving federal small business contracts to some of the biggest companies in the world.