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Wednesday, October 28, 2009

Obama's Plan to Help Small Businesses Evaporates

Petaluma, Calif. - Last week, President Obama announced his administration's plan for a, "New Small Business Lending Initiative." The new initiative is the next installment in a series of speeches by President Obama, which have yet to yield any results for the small business community.

In his speech President Obama stated, "This administration is going to stand behind small businesses. You are our highest priority because we are confident that when you are succeeding, America succeeds." ( Over the past year, President Obama promised to restore the Small Business Administration's (SBA) budget, restore the SBA Administrator to a cabinet level position, implement the 5 percent set-aside goal for women owned firms, and stop the diversion of federal small business contracts to corporate giants. To date, none of these promises have been honored. (

Since the recession began, the government has spent roughly $2.8 trillion to stimulate our nation's economy. ( President Obama stated that stimulus spending has led to small businesses receiving $13 billion in new loans and $4.3 billion in federal contracts, for a total of $17.3 billion. That means small businesses have received only 0.6 percent out of the $2.8 trillion in stimulus funds invested by the government. In comparison, AIG received $180 billion in taxpayer money, while America's 27 million small businesses have received $17.3 billion.

Regarding the new initiative, Keith Girard in stated, "whether they [Obama Administration] will get desperately needed capital to small businesses in a meaningful way is problematic at best." ( On the Huffington Post, Arianna Huffington stated, "if this were really a high-priority for the administration, it could, you know, actually do something about it. Right now. The executive branch has plenty of weapons at its disposal to force banks still dependent on billions of dollars in taxpayer funds and guarantees to change behavior." (

Last year President Obama stated that for every billion dollars spent, 40,000 new jobs would be created. ( Based on the Obama Administration's estimates regarding job creation, stimulus spending to date should have created 640,000 jobs, however, a recent report has revealed that only 30,383 jobs have been created. (

On August 18, President Obama announced a government-wide plan led by SBA Administrator Karen Mills and Commerce Secretary Gary Locke to increase contracting opportunities for small businesses. The plan included over 200 events nationwide within 90 days; over 70 days after the announcement no schedule of these events has been released. (


Monday, October 26, 2009

Upcoming Obama Conference Could Be Bad News for Small Business

October 26, 2009

Petaluma, Calif. – On Wednesday, October 21, President Barack Obama announced plans to convene a conference of "regulators, congressional leaders, lenders and small businesses to determine what additional steps we can take to get credit flowing to small businesses that want to expand and create more jobs." (

Small business groups like the American Small Business League (ASBL) are concerned the real agenda of the upcoming Obama Administration small business conference will be to adopt legislation and policy that will change the definition of a small business and divert federal small business contracts to wealthy venture capitalists. (

The Small Business Act requires that a small business be "independently owned." Firms that are owned and controlled by venture capitalists are not considered small businesses in federal small business contracting and grant programs.

The venture capital industry, led by the National Venture Capital Association (NVCA) has spent millions of dollars lobbying members of Congress to change the current definition of a small business to allow even billionaire venture capitalists to participate in federal small business contracting programs. (

During his 2003 race for a seat in the U.S. Senate, President Obama developed deep ties within the venture capital industry. Since then, President Obama has received significant contributions from the NVCA and its members.

Both the House and Senate small business committees have attempted to pass legislation that could destroy millions of legitimate small businesses by diverting billions of dollars in federal small business contracts to wealthy venture capitalists that have contributed millions of dollars to key democratic leaders in Congress.

House Small Business Committee Chair Nydia M. Velázquez (D - NY) introduced H.R. 3567, Small Business Investment Expansion Act of 2007, which would have changed the definition of a small business for all federal programs to include firms owned and controlled by venture capitalists. In a story titled, "Velázquez Champions VC Firms at Small Business Expense," by Keith Girard,, Velázquez was accused of "quarterbacking the venture capital industry's efforts." (

"I predict that President Obama will try to cheat legitimate small businesses by diverting billions of dollars in federal small business contracts to his wealthy venture capitalist contributors under the guise of 'increasing access to capital for small businesses,' " ASBL President Lloyd Chapman said.


Christopher Gunn
Communications Director
American Small Business League
(707) 789-9575