Obama's Plan to Close the Small Business Administration Makes No Sense, According to the American Small Business League

The following is a statement from the American Small Business League President, Lloyd Chapman

PETALUMA, Calif., Sept. 26, 2013 /PRNewswire-USNewswire/ -- In November of 2008 I predicted President Obama would try and close the Small Business Administration (SBA) under the guise of combining it with the Department of Commerce. In January of 2012 he proved me right and announced his plans to do exactly that.

When Ronald Reagan tried to permanently close the SBA his plan was to combine it with the Department of Commerce.

President Obama's sole justification for closing the SBA is to save $300 million a year. The SBA annual budget is around $700 million. The Pentagon budget is around $700 billion. The SBA budget is just .001 percent of the Pentagon budget.

The Pentagon's own auditors found they cannot account for 25 percent of their expenditures. That means Monday through Friday, 8 a.m. to 5 p.m., the Pentagon loses around $86 million an hour. The Pentagon loses more money before lunch each day than President Obama proposes to save in a year by closing the SBA. That means the Pentagon loses enough of our tax dollars every day to run the SBA for a year.

Every year of the Obama administration, the SBA Inspector General, Peg Gustafson, who was appointed by President Obama, has named the diversion of federal small business contracts to corporate giants as the number one problem at the SBA.

The SBA was forced to release information under the Freedom of Information Act that proved over 230 Fortune 500 firms received federal small business contracts last year. No federal law allows Fortune 500 firms to be considered small businesses.

The SBA represents the interests of the nation's 28 million small businesses. The Department of Commerce represents the interests of the nation's largest corporations. When the most persistent problem at the SBA is the diversion of federal small business contracts to corporate giants, does it make sense to combine those two agencies? I don't think it does. I think that might best be described as letting the fox watch the hen house.

America is facing the worst economic downturn since the great depression. U.S. Census Bureau data tells us small business are responsible for over 90 percent of the net new jobs, over 50 percent of the private sector work force and over 50 percent of the GDP. Clearly, small businesses are the engine of economic growth and job creation in America.

Does it really make sense to close the only agency in government to help the 28 million small businesses that create over 90 percent of the net new jobs to save less money than the Pentagon loses before lunch each day? I don't think it does.

For the latest video from the ASBL, click here.

SOURCE American Small Business League