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An Open Letter to Starbucks CEO Howard Schultz from American Small Business League President Lloyd Chapman

August 19, 2011

Petaluma, Calif. – I had the pleasure of watching your recent interview on CNN. I agree that re-election is the primary motivation for politicians, and to starve them of funding is exactly what needs to be done. Your leadership on this issue is inspiring.

Congress needs to go back to work, focus on job creation and solve the crisis of uncertainty. That said, the most effective economic stimulus President Barack Obama and Congress could implement would be to direct more existing federal infrastructure spending to small businesses, our nation’s chief job creators. This is an issue my organization, the American Small Business League, advocates for on a daily basis.

The latest U.S. Census Bureau data indicates that small businesses create 90 percent of all net new jobs, employ more than half the private sector workforce, are responsible for more than half of GDP and more than 90 percent of U.S. exports. It is clear that economic recovery needs to be based on small businesses.

I think members of Congress realized this in 1953 when they passed the Small Business Act. Today that law requires that 23 percent of all federal contract dollars be awarded to small businesses. Yet since 2003, a series of federal investigations have found most of that money has gone to Fortune 500 companies and other large firms.

In Report 5-15, the Small Business Administration Office of Inspector General referred to the issue as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.”

During President Obama’s campaign he stated, “It is time to end the diversion of federal small business contracts to corporate giants.”

The Small Business Act defines a small business as generally less than 500 employees and independently owned, which, by definition, excludes publicly traded companies. Therefore, President Obama could stimulate the economy with an executive order stating, “The federal government will no longer report federal contracts awarded to publicly traded companies as small business contracts.” Our research indicates this would redirect up to $200 billion annually in federal infrastructure spending to small businesses.

It is a shame there are not leaders like you in Washington. Maybe with your help, we can communicate this message to Congress and rescue our nation’s economy. 




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Reid Brownlie
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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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