September 8, 2010
Petaluma, Calif. – On Wednesday, President Barack Obama proposed a new economic plan aimed at creating jobs and stimulating the economy. As predicted, the plan fails to address the simplest, most logical and effective means of creating jobs and stimulating the nation’s failing economy; bringing an end to the diversion of federal small business contracts to corporate giants.
The Small Business Act requires 23 percent of the total value of all government purchases to go to small businesses. The government is not currently meeting that goal as a result of to the diversion of billions of dollars a year in small business contracts to corporate giants. With the annual federal acquisition budget for foreign, domestic, classified and unclassified acquisitions hovering around $1 trillion, small businesses should be receiving roughly $230 billion a year in federal contracts. The Obama Administration is only claiming to have awarded $96.8 billion to small business, and over half of those funds actually went to large businesses. (http://www.asbl.com/documents/ASBL_2009_dataanalysis.pdf)
Since 2003, over a dozen investigations have found most federal small business contracts actually go to Fortune 500 firms and corporate giants around the world. (http://www.asbl.com/documentlibrary.html)
The Obama Administration’s new stimulus plan calls for $300 billion in accelerated or expanded tax breaks for businesses, and $50 billion in federal spending to repair roads, railways and runways. The American Small Business League (ASBL) maintains that the administration’s proposal is not an efficient and effective means of creating jobs. Research by the Economic Policy Institute, and Princeton University's Center for Economic Policy Studies indicates that tax cuts do not effectively create jobs or stimulate the economy. In order to create jobs, the government needs to direct existing federal spending to small businesses. (http://www.huffingtonpost.com/2010/07/28/bush-tax-cuts-extending_n_662743.html; http://www.epi.org/analysis_and_opinion/entry/tax_cuts_wont_create_jobs/)
The ASBL recommends that the administration take the following steps to immediately provide a significant boost to America’s middle class:
1. Pass H.R. 2568, the Fairness and Transparency in Contracting Act, which would stop the diversion of over $100 billion a year in federal small business contracts to large corporations.
2. Enforce the existing $100,000 set-aside for small businesses on all government contracts, including contracts on the GSA schedule.
3. End the Comprehensive Subcontracting Plan Test Program.
“If President Obama really wants to stimulate the economy and create jobs he needs to make good on his campaign promise when he said, ‘It is time to end the diversion of federal small business contracts to corporate giants,’ ” ASBL President Lloyd Chapman said. (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)