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Monday, February 16, 2009

Stimulus Bill Ignores Current Government Spending

February 16, 2009

Petaluma, Calif. - President Barack Obama hopes the stimulus bill will create jobs and stimulate America's faltering economy with approximately $550 billion in additional government spending over the next few years.

In addition to new spending, the stimulus bill should have included provisions to address over $600 billion a year the government currently spends in a manner that would have created even more jobs.

One of the most effective economic stimulus bills ever passed by Congress was the Small Business Act of 1953. Current federal law based on the Small Business Act, stipulates that a minimum of 23 percent of all federal contracts and sub-contracts be awarded to small businesses. Congress passed the Small Business Act based on the realization that most Americans are employed by small businesses. The same statistics hold true today.

The most recent U.S. Census Bureau data indicates that firms with less than 20 employees account for 90 percent of all U.S. firms and are responsible for more than 97 percent of all new jobs in America. These firms also employ approximately 50 percent of all private sector workers. Economic experts agree, directing federal infrastructure spending to small business is the most efficient way to create jobs and stimulate the economy. (

Since 2003, over a dozen federal investigations found fraud and dramatic abuses in virtually every federal small business contracting program. Several investigations found hundreds of billions of dollars in federal contracts earmarked for small businesses were diverted to Fortune 500 firms. ABC, CBS and CNN aired stories on the abuses. (ABC,; CBS,; CNN,

Based on all available data, it would appear that the simplest and most effective method of stimulating the national economy and creating jobs would be to stop the dramatic abuses in existing government economic stimulus programs.

President Obama recognized the magnitude of this problem as early as February of 2008 when he released the statement, "Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants." (

The simplest way for President Obama to stimulate the economy is to make good on that campaign promise. He should bring an end to the fraud and abuses that have diverted hundreds of billions of dollars in federal small business contracts away from America's nearly 27 million hardworking small businesses, that create over 97 percent of all new jobs.

Millions of jobs could be created using existing federal programs at no additional cost to taxpayers.


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