Lloyd Chapman: Obama to Dismantle Small Business ...

Data from the U.S. Census Bureau tells us that small businesses are responsible for more than 90 percent of net new jobs in America. Small businesses generate more than half of the GDP, half of the private sector workforce, and 90 percent of all U.S. exporters are small businesses.

I'm concerned that while America is facing the worst economic downturn of the last 80 years, federal programs assisting small businesses could disappear -- a scenario that could play out as Congress and the president negotiate budget cuts to avoid the fiscal cliff.

President Obama has announced plans to essentially dismantle the Small Business Administration (SBA) by combining it with the Department of Commerce. The Department of Commerce represents the interests of our nation's largest corporate giants, not small businesses.

For more than 30 years, Fortune 500 firms, particularly in the defense and aerospace industries, have pushed to end the federal programs mandating that 23 percent of federal funds be awarded to small businesses. The easiest way to do this is to close the SBA altogether. Those big companies want 100 percent of federal contracts and subcontracts, and they've spent hundreds of millions of dollars lobbying to end federal small business programs. Combining an agency with the Department of Commerce is an easy way to get rid of that agency with minimal resistance from the public.

Small businesses won't have anyone in their corner if the Department of Commerce, with its close ties and loyalties to large corporations, absorbs the SBA. Small businesses stimulate job growth, and without a specific entity supporting them, our economy can't improve.

Following President Obama's proposal to combine the SBA and the Department of Commerce, Joe Lieberman (Ind-CT) put a bill through congress that would allow the president to combine federal agencies. But the agencies that President Obama has proposed combining are some of the smallest in Washington. I think it's quite obvious that combining the proposed agencies would have an insignificant impact on the fiscal deficit. The SBA's 2012 budget, at $985 million, is a drop in the bucket compared to what is allotted to some of the other agencies, like the $530.6 billion given to the Department of Defense for the same year. Cutting funds from bigger agencies would be the smart solution, if the real goal was to save money.

President Obama claims that combining the SBA with the Department of Commerce will save $300 million per year, but that's chump change compared to the $9 billion he wants to add to our foreign aid budget in 2013. If the goal really is to save American taxpayers some money, why is President Obama trying to close the only agency supporting the 28 million small businesses that are our nation's chief job creators, but still trying to increase our foreign aid budget?

To put things in perspective, the proposed $9 billion increase in foreign aid per year could fund the SBA for a decade.

House Speaker John Boehner (Rep-OH) recently acknowledged that small businesses create the majority of net new jobs in America and tax hikes on small businesses could cost the nation about 700,000 jobs. I predict that if President Obama does combine the SBA with the Department of Commerce, within three to five years, federal programs for small businesses will no longer be in place and Fortune 500 companies will have hijacked 100 percent of federal contracts.

President Obama's proposal to save money by combing the SBA and the Department of Commerce is ridiculous. The amount of money that will be saved by combining these small agencies will be statistically insignificant. The damage to our economy and small businesses will cost the nation millions of jobs and cause the economy irreparable harm.

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Follow Lloyd Chapman on Twitter: www.twitter.com/LloydChapman

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Source: http://www.huffingtonpost.com/lloyd-chapman/small-business-fiscal-cliff_b_2341324.html

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