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Obama’s Merger of the SBA and Dept. of Commerce is Designed to Kill Federal Small Business Programs, Not Shrink Government

Despite the President’s claim that it will ‘streamline’ the federal government, Obama’s recent proposal to consolidate six federal trade and commerce departments is actually an attempt to close the Small Business Administration.

For over three years I have been predicting that President Obama would try to close the SBA by combining the agency with the Department of Commerce. The reason— he is directed by the Fortune 500 firms that control our government. These Fortune 500 firms have lobbied our top politicians for decades, trying to close the SBA and wind-down federal small business programs.

I’m talking about the same Fortune 500 firms that fund the majority of K Street lobbyists, contribute the most to presidential campaigns and purchase the majority of all national advertising. These firms want the SBA closed because they don’t want to compete with small businesses for federal contracts, they don’t want to subcontract to small businesses. Bottom line— they want 100 percent of all federal contracts.

I can’t recall a time when any President in recent history has held a national press conference to talk about saving $3 billion over a decade— to put that amount in perspective, the $3 billion over 10 years that will be saved by the consolidation is equal to .05 percent – or five hundredths of one percent— of the $6 trillion that the Pentagon is projected to spend in the next decade. If President Obama were really trying to shrink government he wouldn’t start by consolidating the smallest agency in town.

When you really think about it, it’s illogical to hold a national press conference about such a miniscule slash in federal spending. The whole press conference was a ruse to distract the public, the media and Congress about the President’s plans to wind down federal small business programs and therefore allow large firms to hijack 100 percent of all federal small business contracts.

Take his elevation of SBA Administrator Karen Mills to the president’s cabinet, for example. Congress has 90 days to decide whether to approve the President’s consolidation request. If approved, the SBA dissolves and Administrator will have no agency to represent. Basically, President Obama’s proposal means that Ms. Mills will probably be out of a job in 90 days.

In the midst of the worst economic downturn in 80 years, the very last thing our nation needs is the reduction of federal programs that support small businesses. As any good economist will tell you, small businesses are the nation’s chief job creators.

According to the latest Census Bureau data, America’s 29 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.

Nevertheless, if Obama’s merger is successful, within a matter of months small businesses will once again be unrepresented on the president’s cabinet and they will no longer have a federal agency designed to assist them.

As I have been saying for a long time now; if you stop listening to what he says and look at what he does, you’ll discover that Barack Obama is one of the most anti-small business presidents in U.S. history.

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Lloyd Chapman

Lloyd Chapman