New Obama policies will harm small businesses

Lloyd Chapman Contributor
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I believe the Obama administration will propose a number of new policies this summer or fall that will be extremely detrimental to America’s 27 million small businesses. My goal is to make it as difficult as possible for President Obama to implement any anti-small business policies by passing them off as helping small businesses.

Although President Obama has given numerous pro-small business speeches, his administration’s actual policies towards small businesses paint a completely different picture.

A recent report by the American Small Business League (ASBL) found President Obama had broken every promise he made to small business owners during his campaign, and adopted numerous policies which damaged federal programs to assist small businesses and firms owned by women, minorities and veterans.

During his campaign, President Obama promised to restore the Small Business Administration’s (SBA) budget and staff, restore the SBA Administrator to a cabinet level position, implement the 5 percent set-aside contracting goal for woman-owned firms, and end the diversion of federal small business contracts to “corporate giants.” To date, not one of these campaign promises has been honored.

The battle between greedy corporate giants and legitimate small businesses over roughly $150 billion a year in federal small business contracts is nothing new. For years, the defense and aerospace industry has been aggressively lobbying the White House and Congress for legislation and policies that have allowed them to hijack hundreds of billions of dollars in federal funds earmarked for small businesses. Now with the Obama administration, wealthy venture capitalists and the National Venture Capital Association (NVCA) have joined the assault on America’s small business contracting programs.

Over the last twenty years, government officials have established numerous policies under the guise of helping small businesses, which actually allow federal small business contracts to go to Fortune 500 firms and other large businesses. President Obama will almost certainly use this tried and true Washington ploy for cheating small businesses. I believe he will push policies that will divert even more federal small business funds away from legitimate small businesses and into the hands of big businesses and wealthy venture capitalists that backed his campaign and litter his administration.

President Obama’s latest public relations gimmick called for the establishment of a “small business task force,” to produce recommendations for the small business community. However, his small business task force is packed with some of Washington’s most traditional anti-small business forces. The Pentagon, National Aeronautics and Space administration (NASA), the General Services administration (GSA) and the U.S. Department of Commerce, were included in the task force amongst a long list of other federal agencies. Their recommendations are due in August. It would not surprise me if their recommendations to “help small businesses” included some proposal to weaken or even dismantle the Small Business administration (SBA) by breaking it up, or combining it with another federal agency like the U.S. Department of Commerce. Eliminating an agency by combining it with another larger agency is an old Washington trick. These recommendations will all be made under the guise of strengthening the SBA and it’s mission to help small businesses. Such as change would do irreparable damage to America’s more than 27 million small businesses.

The Obama small business task force will also almost certainly propose a change in the long standing federal definition of a small business as a firm that is, “independently owned.” The new definition of a small business will likely include firms that are actually owned or controlled by some of the nation’s wealthiest venture capitalists. This will be done under the guise of “increasing access to capital for small businesses.” Obama’s plan to divert federal small business contracts to his friends and supporters in the venture capital industry can be seen in his appointment of venture capitalist and Tootsie Roll heiress, Karen Mills, to head the SBA. Additionally, President Obama appointed Winslow Sargeant to head the SBA Office of Advocacy. Like Mills, Sargeant is another venture capitalist and major Obama campaign contributor and fund raiser.

President Obama will likely continue his campaign to reduce transparency, rather than honoring his promise to increase transparency, in federal small business contracting programs. The ASBL has now filed seven lawsuits against the Obama administration under the Freedom of Information Act (FOIA) for refusing to release even the most basic information on federal small business contracting programs.

In March of this year, Obama officials at the GSA removed ten years worth of contracting data that has been used in over a dozen federal investigations to uncover the diversion of hundreds of billions of dollars in federal small business contracts to corporate giants. They have now announced a proposed policy change that will almost certainly contain new regulations to further limit transparency in federal small business contracting programs. They will be taking public comment on the proposed policies until July 12, 2010.

In summary, I predict before the end of 2010, the Obama administration will attempt to adopt policies and/or legislation that will be extremely harmful to our nation’s 27 million small businesses. President Obama will attempt to sell each and every anti-small business policy as a new policy to help small businesses land federal contracts and “increase access to capital.” It will be more lies and broken promises from a president that can no longer be trusted to act in the best interest of our nation’s 27 million hard working small businesses.

Lloyd Chapman is the president of America’s Small Business League.