President Obama has announced on several occasions his desire to essentially close the Small Business Administration (SBA) by combining it with the Department of Commerce. Anyone who has been in Washington long enough to have lunch knows the Department of Commerce is essentially a division of the U.S. Chamber of Commerce. The U.S. Chamber and I aren’t exactly close friends.

President Obama

If Mitt Romney wins this election, he will start talking about closing the SBA before Anne gets the new curtains ordered for their White House bedroom. Despite their unending campaign baloney about investing in the middle class and creating jobs, Republicans, since Ronald Reagan, have had it out for the SBA. Reagan tried closing the SBA twice. The corporate bosses want that 23 percent of the federal contracts allotted to small businesses and they want it now.

President George W. Bush tried to starve the agency to death during his administration by cutting the SBA budget and staff by almost 50 percent. The agency was so understaffed during the Hurricane Katrina aftermath that 2,000 temporary employees had to be hired to assist the storm victims in receiving SBA backed loans to rebuild their businesses. He told his SBA appointee, Administrator Hector Baretto, that he wanted the agency closed by the end of his first term. Some mouthy guy in California launched a PR campaign that made that assignment a lot more difficult than Bush and Barreto had ever expected and the SBA was saved. Barrreto was ultimately fired for his failure to fulfill his mission.

Fortune 500 firms and the U.S. Chamber of Commerce have lobbied to close the SBA for decades. The Small Business Act mandates that a minimum of 23 percent of the total value of all federal contracts be awarded to small businesses. Why do corporate giants want the SBA closed? It’s really quite simple – GREED. The corporate giants that call the shots in Washington DC want every penny the federal government spends to go straight into their pockets.

The fact that small businesses are responsible for more than 90 percent of all net new jobs in America, 50 percent of the private sector work force, more than 50 of the gross domestic product (GDP) and more than 90 percent of all U.S. exporters doesn’t mean a hill of beans to the most ruthless corporate giants ruling the roost in Washington DC.

Let’s take a quick inventory, the U.S. is in the midst of the worst economic downturn in 80 years, small businesses are responsible for the overwhelming majority of net new jobs, and there is only one miniscule federal agency to service the 27 million small businesses where the majority of Americans work.

The corporate-backed, corrupt politicians see this issue a different way. They don’t want to squander a measly $900 million a year on the only federal agency that services the small business that are responsible for the vast majority of net new jobs. Forget the fact that the SBA’s budget is roughly one tenth of one percent of the budget allotted to the Department of Defense (DoD), which outright loses or misplaces almost 10 times as much money a year as it takes to run the SBA. There is obviously no way we can ever balance the budget and cut the deficit without closing one of the smallest agencies in Washington DC, right?

In all seriousness, the best way to determine if a politician is an outright, lying crook and a conman is to just look for one that proposes to close the SBA under the guise of saving money to balance the budget and cut the deficit.

Any honest elected official in Washington would realize that doubling the SBA staff and budget is the best way out of our economic recession. The SBA budget was higher 30 years ago than it is today. We need to reopen the SBA field offices the Bush administration closed. We need to reinvigorate each and every federal program to help our nation’s chief job creators – small businesses.

Hey, I’ve got a wacky idea, why don’t we stop giving federal small business contracts to some of the biggest companies on earth? Every year, for the past seven years, the SBA Office of Inspector General (SBA OIG) has named the diversion of federal small business contracts to corporate giants as the number one management challenge at the SBA.

I know it sounds crazy to quit giving billions of dollars a month in federal small business contracts to Fortune 500 firms but, who knows, it just might help the 27 million small businesses that are the irrefutable engine of economic growth and job creation in this country.

Creative Commons photo by Bernard Pollack on Flickr.

If Mitt Romney is elected President and Republicans take over both the House and the Senate, it would be a nightmare for small businesses.

Will small business dry up under President Romney? (Photo: Kevin Dooley / Flickr)

I don’t want to upset my Republican buddies but I predict that Mitt Romney would follow a long line of Republicans that have been trying to close the Small Business Administration (SBA) and end small business programs ever since Ronald Reagan was president.

Reagan tried to close the SBA twice. His budget director David Stockman even went before Congress and argued for closing the SBA, making the outrageous claim that the SBA was “a billion dollar waste—a rat hole.” Thankfully, Senate Democrats, led by Senator Carl Levin (Dem-MI), opposed the move.

While Reagan’s plans to close the SBA failed, I believe he devastated small businesses by changing the definition of a small business from 100 employees to 500 employees, which was illegal. To change the definition like that, you’d have to put the proposal up for public comment, which Reagan didn’t do. Moreover, a company with 500 employees is much too large to be a small business, considering that 98 percent of all U.S. firms have less than 100 employees and 89 percent of U.S. firms have less than 20 employees.

The SBA was safe under President George H. W. Bush but President George W. Bush removed the SBA Administrator from a Cabinet-level position and told his SBA Administrator, Hector Barreto, to close the SBA by the end of his first term. I’ve spoken with people who said Barreto admitted this in a meeting. Bush cut the SBA budget and staffing every year that he was President and the budget has never recovered. Even when Ronald Reagan was president, the SBA’s budget was more than $1 billion.

Republicans are always talking about small business, but their track record is appalling. I believe that the Republican desire to close the SBA is based on the party’s marriage with big business. Federal law mandates that a minimum 23 percent of federal contracts must be awarded to small businesses. That’s more than $120 billion annually that big businesses want.

If Mitt Romney is elected and Republicans control both houses, within a matter of months you’ll see the SBA abolished. At the very least, you’ll see the SBA budget slashed just as it was during the Bush administration, or you’ll see them close the agency under the typical Washington scam of combining it with the Department of Commerce. Combining the SBA with the Department of Commerce is a way to close the agency without public scrutiny. You won’t be able to see the budget being cut or the employees being laid off.

So my prediction is that a Mitt Romney Whitehouse and Republican-controlled legislature would end all federal small business programs, including those for women-owned, minority-owned and veteran-owned small businesses. This would be detrimental to the economy.

The smartest most cost-effective thing you could do to create jobs is to simply uphold existing federal law that says 23 percent of all prime contracts dollars go to small businesses. After all, small businesses employ more than half of the private sector workforce, are responsible for half the gross domestic product, more than 90 percent of U.S. exports and, according to U.S. Census Bureau (PDF), more than 90 percent of all net new jobs. Unfortunately our government is controlled by big business and their greed and corruption knows no bounds.

As a small business advocate, I am afraid of a Romney White House and a Republican legislature.