Stimulus Bill Spending Shuts Out Small Business

FOR IMMEDIATE RELEASE
February 18, 2009

Petaluma, Calif. - President Barack Obama's stimulus bill offers $499 billion in new government spending. The bill contains no specific provisions to direct even one dollar of those funds to America's 26 million small businesses.

According to the most recent data from the U.S. Census Bureau, firms with less than 20 employees account for over 90 percent of all American businesses and are responsible for more than 97 percent of all new jobs. These small businesses also employ over 50 percent of all private sector workers. (http://www.asbl.com/documents/INKSBAReport.pdf) Inc.com and CNNMoney.com released stories on the findings. (http://www.inc.com/news/articles/200708/data.html, http://money.cnn.com/2008/07/30/smallbusiness/job_creation.fsb/index.htm)

Since the purpose of the stimulus bill is job creation, small business owners and advocates are puzzled as to why the bill virtually ignores the very firms that create 97 percent of all new jobs.

In addition to being shut out of the new economic stimulus bill, federal investigations have uncovered that small businesses are not receiving the minimum 23 percent of federal contracts as required by existing federal law.

According to a series of more than 15 federal investigations that have been released over the last seven years, the vast majority of contracts the Small Business Administration (SBA) reported as going to small businesses actually went to Fortune 500 firms and hundreds of other clearly large businesses around the world. (http://www.asbl.com/documentlibrary.html)

As much as $100 billion a year in federal small business contracts have been diverted by the SBA and federal contracting officials to firms such as Xerox, Wal-Mart, Microsoft, Home Depot, Halliburton, Raytheon and General Dynamics. Federal contracting officials have even diverted U.S. government small business contracts to some of Europe's largest corporate giants. Rolls-Royce and British Aerospace (BAE) have received hundreds of millions of dollars in government small business contracts along with French defense contractor Thales Communications and Dutch conglomerate Buhrmann NV, which is headquartered in Amsterdam with thousands of employees worldwide.

As early as February of 2008, President Obama recognized the damage diverting government small business contracts was having on the national economy when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

Since making that statement almost a year ago, President Obama has not proposed any policies to make good on his campaign promise. Without legislation to stop it, the middle class economy will continue to suffer, as over $400 million a day in government small business contracts continue to be diverted from American small businesses.

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