SOURCE: American Small Business League

December 19, 2013 08:00 ET

New Bill in Congress Could Close Small Business Administration, According to the American Small Business League

PETALUMA, CA--(Marketwired - Dec 19, 2013) - North Carolina Senator Richard Burr is proposing to resurrect a plan from the Reagan Administration to essentially close the Small Business Administration by combining it with the Department of Commerce and the Department of Labor.

Former President Ronald Reagan tried to permanently close the Small Business Administration by combining it with the Department of Commerce. Senator Burr's bill is almost identical to the Reagan plan to close the SBA. (news story)

Burr's bill, S. 1836 is cosponsored by Indiana Senator Daniel Coats and Oklahoma Senator James Inhofe. All three Senators are Republicans.

According to the U.S. Census Bureau, 98% of all U.S. firms have less than 100 employees. There are approximately 28 million small businesses in America and those small businesses are responsible for over 90% of the net new jobs, over 50% of the Gross Domestic Product, over 50% of the Private sector work force and over 90% of all U.S. exporters.

The SBA is the only agency in government to assist American small businesses. The SBA's current budget is approximately .001% of the Pentagon's budget.

Opponents of S. 1836 believe the true purpose of the bill is to close the SBA to obscure hundreds of billions in fraud that has been uncovered in small business contracting programs primarily at the Defense Department.

Over the last ten years a series of federal investigations and investigative reports in the media have found billions in federal small business contracts have actually gone to some of the nation's largest defense contractors. According to the most recent data from the Federal Procurement Data System, last year 235 Fortune 500 firms received federal small business contracts.

Every year for the last nine years the SBA Office of inspector General has named the diversion of federal small business contracts to corporate giants as the number one problem at the SBA. (report 5-15)

If S. 1836 were to be signed into law, the Department of Commerce, which represents the nation's largest firms, including the 235 Fortune 500 firms that are currently receiving federal small business contracts, would have complete control over all federal small business programs.

The American Small Business League (ASBL) was anticipating the introduction of a bill to close the SBA. The ASBL recently completed a survey of 3000 Chambers of Commerce across the country about a bill to close the SBA or combine it with the Department of Commerce. Only two Chambers of Commerce said they would support such legislation.