Petaluma, Calif. - While Senators Barack Obama and John McCain are presenting dueling economic recovery bills for the middle class, a bill has been floating around Congress for more than a year that could immediately infuse more money into the middle class economy than anything that has been proposed so far.
Draft legislation that was written by Senator Barbara Boxer (D - CA) and American Small Business League (ASBL) President Lloyd Chapman, could infuse up to $10 billion a month in federal funds back into the hands of middle class firms that are struggling to cope with the current economic catastrophe.
The draft legislation is titled, "the Small Business Fairness and Transparency in Contracting Act," and is based on provisions of the original Small Business Act, which was passed in 1953. The Small Business Act defines a small business as "independently owned" and precludes firms that are publicly owned or publicly traded from being considered small businesses for the purposes of government contracting. Based on the original Small Business Act, today the federal government has a small business-contracting goal of 23 percent or about $135 billion a year.
The new legislation simply states that the federal government can no longer report awards to publicly traded companies as small business awards.
The legislation is in response to over a dozen federal investigations, which have found that the Bush Administration has diverted hundreds of billions of dollars in federal small business contracts to some of the largest corporations in the United States and Europe.
In March of 2005, the Small Business Administration Office of Inspector General (SBA OIG) issued Report 5-15, which stated, "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (http://www.sba.gov/ig/05-15.pdf)
The General Accounting Office (GAO) first exposed the diversion of billions of dollars in federal small business contracts to corporate giants in 2002. (http://www.gao.gov/new.items/d03704t.pdf) So far, no member of Congress other than Senator Boxer has even proposed legislation to address this problem.
In February, Senator Obama acknowledged the need to address the problem and released this statement, "It is time to end the diversion of federal small business contracts to corporate giants."
This new legislation could solve the diversion of government small business contracts to Fortune 500 firms and return billions of dollars in federal small business contracts back to the middle class economy.
Recently, Congress passed a $700 billion emergency bailout bill for Wall Street, now it's time to pass an emergency bailout bill for the middle class economy. There is no need to reinvent the wheel. This legislation is a free, easy and simple solution to the diversion of over $100 billion a year in federal small business contracts to large corporations and is based on existing federal laws and programs.
If this legislation is passed, we could immediately see up to $10 billion a month in additional federal funds flowing back into the small businesses where most Americans work. This will have a more significant impact on our nation's middle class economy than anything that has been proposed by anyone in Congress including Senator Obama or Senator McCain.
This legislation would have an immediate and significant impact on our nation's middle class economy and there isn't one good reason why Congress shouldn't pass this legislation as soon as possible.