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Jobs Bill Will Allow the Diversion of Federal Small Business Funds to Corporate Giants to Continue

March 18, 2010

Petaluma, Calif. – President Barack Obama signed the new jobs bill today.  Both the House of Representatives and the Senate failed to include provisions in the bill that would halt the diversion of up to $120 billion a year in federal small business contracts to Fortune 500 firms and other large businesses.

Small business advocates had hoped that President Obama would include a provision in the bill to make good on his February 2008 campaign promise to, "end the diversion of federal small business contracts to corporate giants." http://www.barackobama.com/2008/02/26/the_american_small_business_le.php  

Since 2003, over a dozen federal investigations have found that every month billions of dollars in federal small business contracts are diverted to large businesses around the world.  For five consecutive years, the Small Business Administration Office of Inspector General (SBA IG) has referred to the diversion of federal small business contracts to large businesses as the #1 management challenge facing the agency. (http://www.asbl.com/documentlibrary.html ; http://www.sba.gov/idc/groups/public/documents/sba_homepage/oig_reports_tmc_fy10.pdf)  

The American Small Business League (ASBL) estimates that over $10 billion a month in federal small business funds are diverted to large corporations. 

"I don't think this jobs bill is going to work.  It's too little, too late. I think it's important to realize that while President Obama signed the jobs bill this morning, he'll allow over $400 million in federal small business funds to be diverted to large businesses today alone.  This diversion has gone on every day that he has been in office, and apparently it's going to continue throughout the remainder of his presidency," ASBL President Lloyd Chapman said. "Ending the diversion of federal small business contracts to large businesses would put more money into the middle class and create more jobs than anything President Obama or Congress have ever proposed."

The ASBL does not believe this jobs bill is going to work long term. The provisions of this bill will be a temporary boost at best, while at the same time increasing the national deficit.

In May of 2009, Congressman Hank Johnson (D-4-GA) introduced H.R. 2568, the Fairness and Transparency in Contracting Act.  If passed, the bill would create millions of jobs by halting the flow of federal small business contracts to large businesses and redirecting more than $120 billion a year in federal infrastructure spending to legitimate small businesses.  Although the bill has bipartisan support with 23 co-sponsors, to date President Obama has refused to endorse the legislation. (http://www.asbl.com/documents/hr2568.pdf)  


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Reid Brownlie
Communications Contact

American Small Business League
3910 Cypress Dr., Suite B
Petaluma, CA 94954

707-789-9575 | fax 707-789-9580
email to rbrownlie@asbl.com

 

 

     

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