FOR IMMEDIATE RELEASE
January 30, 2009
Petaluma, Calif. – President Barack Obama's current economic stimulus plan makes no mention of any provisions to address a myriad of problems that have been uncovered in existing federal programs designed to stimulate the economy and create jobs.
The Small Business Act of 1953 was one of the first economic stimulus plans adopted by the United States government. The purpose of the Small Business Act was to direct federal infrastructure funds to small businesses where over half of Americans work and where the overwhelming majority of new jobs are created. Since 1953, the Small Business Act has spawned a number of federal programs designed to stimulate the national economy and create jobs by assisting small businesses and firms owned by women, minorities and veterans.
During the Bush Administration, many of the programs were damaged by severe budget cuts and attempts by Bush officials to dismantle the Small Business Administration and its programs. (http://www.gao.gov/new.items/d08995.pdf)
Since 2003, over a dozen federal investigations have been released that found fraud, abuse, loopholes and a dramatic lack of proper oversight in virtually every federal program established to assist small businesses. (http://www.asbl.com/documentlibrary.html)
The single largest problem that has been uncovered is the diversion of up to $100 billion a year in federal small business contracts to Fortune 500 firms and hundreds of other large businesses. ABC, CBS and CNN all released investigative stories that found billions of dollars in federal small business contracts had actually gone to corporate giants such as Wal-Mart, Microsoft, Home Depot, John Deere, Xerox, General Dynamics and European conglomerates like British Aerospace, Rolls Royce and Burhmann NV headquartered in Holland. (ABC, http://www.asbl.com/abc_evening_news.wmv; CBS, http://www.asbl.com/cbs.wmv; CNN, http://www.asbl.com/showmedia.php?id=1170)
In March of 2005, the Small Business Administration Office of Inspector General issued Report 5-15 which stated, "One of the most important challenges facing the Small Business Administration 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)
Federal law currently stipulates that a minimum of 23 percent of the total value of all federal contracts and subcontracts shall be awarded to small businesses. The American Small Business League (ASBL) estimates that if President Obama's economic stimulus plan includes provisions to stop the diversion of federal small business contracts to corporate giants, over $100 billion a year in additional federal infrastructure funds could be redirected to middle class firms and create millions of jobs with minimal expense to taxpayers.
American Small Business League