In President Obama’s State of the Union Address he gave quite a bit of lip service to “middle class economics.”

He said we need to make sure the middle class economy works and we need to find more ways to help families get ahead, to make sure everyone gets their fair share and that everyone should get a fair shot and plays by the same rules.

In reality President Obama’s 2016 budget will resurrect a 30-year-old Ronald Reagan plan to permanently close the only agency in government specifically created to help the middle class, the Small Business Administration (SBA).

According to the latest data from the U.S. Census Bureau 98% of all U.S. firms have less than 100 employees. Those 28 million middle class small businesses are responsible for over 90% of the net new jobs, over 50% of the private sector work force, over 50% of the Gross Domestic Product and over 90% of U.S. exporters.

The single largest federal program in history to boost the middle class economy is the Small Business Act of 1953. Today that law mandates that a minimum of 23% of all federal contracts be awarded to middle class small businesses.

The Small Business Act is probably the most efficient and effective economic stimulus plan ever created to create jobs and boost the middle class economy.

All federal programs to assist middle class small businesses are managed by the agency Obama wants to close, the SBA.

What better way to invest 23% of all government infrastructure spending than to reinvest those tax dollars with the small businesses where most Americans work.

When Ronald Reagan wanted to close the Small Business Administration and end all federal programs that had been designed to help middle class small businesses, his plan to permanently close the SBA was to combine it with the Department of Commerce. Now that is exactly what President Obama is proposing. The only difference is he is calling it “streamlining government” to avoid the avalanche of opposition Regan faced in trying to close the SBA.

Another clear indication Obama obviously wants to close the SBA is he has slashed the agency’s budget more than any agency in government to just $711 million. That’s a 21% drop over last year. The SBA budget was higher 30 years ago when Reagan was President.

To put that into perspective that’s approximately .001% of what the U.S. spends on defense. Mother Jones did a story that showed the Pentagon spends more money on candy and pastries in a year than it takes to run the SBA.

Does it make any sense to anyone to “streamline government” by closing one of the smallest agencies in Washington?

Does it seem reasonable to actually try to “streamline government” by closing the SBA but continue to allow rampant fraud and corruption at the Pentagon cost American taxpayers trillions. Some estimates have found over $8 trillion unaccounted for at the Pentagon. The day before 9/11 Defense Secretary Donald Rumsfeld admitted up to $2.3 trillion was unaccounted for at the Pentagon.

That was before the U.S. invaded Iraq and Afghanistan where the unbridled fraud and corruption really got rolling. In one story they lost $6.6 billion in cash.

Here’s the truth, the corporate giants that virtually own the federal government want 100% of every penny the federal government spends. They can’t do that as long as the SBA is there to oversee all federal programs that mandate small business receive a minimum of 23% of all federal contracts.

Dozens of federal investigations have uncovered rampant fraud in federal small business programs. Hundreds of the largest companies around the world have been found to be the real recipients of hundreds of billions of dollars in federal small business contracts.  Over a dozen investigative reports from the mainstream media have uncovered the fact most federal small business contracts are already being diverted to corporate giants like IBM, Oracle, Hewlett-Packard, Dell, Microsoft, Coke, Verizon, Chevron, GE, Lockheed Martin, Boeing, Raytheon and Northrop Grumman. NBC, CBS, ABC, CNN, CNBC, Fox News, MSNBC and RTTV have all reported on the pervasive fraud in federal small business programs.

Every year of the Obama Administration the SBA Inspector General that Obama appointed has named the diversion of federal small business contracts to corporate giants as the number one problem at the agency and President Obama has done absolutely nothing to stop it.

In 2009, the GAO investigated the SBA and released Report 10-108 that stated, “By failing to hold firms accountable,  SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud…”

I think the real reason Obama wants to close the SBA is to cover-up the hundreds of billions of dollars in fraud that has been uncovered in virtually every SBA managed program.

If you find it hard to believe President Obama could be involved in a cover-up, take a look at a quote from United States Federal District Court Judge William Alsup in a recent Freedom of Information Act case I filed against the Pentagon when they refused to release simple small business subcontracting data.

“The purpose of the Freedom of Information Act is so the public can see how our government works. Congress passed this law to make the small businesses have access to some of these projects, and here is the United States covering it up,” stated Alsup.

Obama’s scam to close the SBA and end all federal programs to help middle class small businesses is undeniably motivated by the desire to cover-up the rampant fraud and corruption that has been uncovered in all federal small business programs during his administration.

The question is who is going to try and stop him other than me?

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Lloyd Chapman

Lloyd Chapman