June 21, 2011
Petaluma, Calif. - According to the U.S. Census Bureau small businesses create over 90 percent of all net new jobs in America. Although small businesses are responsible for the creation of nearly all net new jobs, the Obama Administration has failed to implement economic policies that help small businesses.
A recent study from the Kauffman Foundation found that since 1980 businesses less than five years old have created all net new jobs. However, the American Small Business League (ASBL) estimates that small businesses in America received less than three percent of the Obama Administration’s economic stimulus in 2009. (http://www.kauffman.org/research-and-policy/where-will-the-jobs-come-from.aspx; http://money.cnn.com/news/storysupplement/economy/bailouttracker/)
“It’s no surprise that unemployment has jumped from 7.6 to 9.1 percent since President Obama was elected,” ASBL President Lloyd Chapman said. “He and his economic team have completely ignored the fact that small businesses are the primary job creators in America. Worse, they are diverting small business funds to some of the largest corporations in the world.”
Since 2003, a series of federal investigations have uncovered billions of dollars in federal small business contracts being diverted to corporate giants. In Report 5-15, the Small Business Administration’s Inspector General referred to the problem as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.” (http://www.asbl.com/documentlibrary.html; http://www.asbl.com/documents/05-15.pdf)
Large businesses included in the Obama Administration’s most recent small business data include Boeing, Lockheed Martin, Hewlett-Packard, Xerox, Dell, Raytheon, 3M Company, Northrop Grumman, General Electric and AT&T. Even more telling are the foreign corporations that have received billions of dollars in federal small business contracts, including British Aerospace Engineering (BAE), Rolls-Royce, and Ssangyong Co. (www.asbl.com/documents/ASBL_2009_dataanalysis.pdf)
During the 111th Congress, Representative Hank Johnson (D-GA) introduced the Fairness and Transparency in Contracting Act, which is aimed at closing loopholes and ending fraud and abuse in small business contracting programs. The bill would direct billions of dollars in existing government infrastructure spending to small businesses, and create an estimated 1.8 million jobs. (http://www.asbl.com/showmedia.php?id=1842)
“Ending the diversion of federal small business contracts to large corporations would redirect more money into the hands of the middle class and create more jobs than any economic policy proposed by the Obama Administration to date,” Chapman said. “It is time for President Obama and Congress to support passing the Fairness and Transparency in Contracting Act.”