Reasonable Spending Cuts Could Save the Small Business Administration and Millions of Jobs

PETALUMA, CA--(Marketwire - Dec 13, 2012) - The following is a statement by the American Small Business League:

Under the guise of saving money, President Obama reiterated his long-standing plan to eliminate the Small Business Administration (SBA) by combining it with the Department of Commerce. The SBA, which acts as the main support system for American small businesses, receives about one tenth of one percent of the budget allotted to the Department of Defense. The SBA could easily remain open if U.S. policymakers were willing to cut the billions of dollars of waste out of the annual budget.

The government squandered $19 billion in American taxpayer dollars last year alone.

Government oversight was a leading factor in the failure of a $5 billion Army uniform makeover, $120 million in fraudulent unemployment payments and billions of dollars on retirement and disability payments to dead federal employees.

In one year, the government spent $35.38 million on summertime congressional parties. Both the Democratic and Republican parties each received $17.7 million for entertainment and catering and producing biographical films for the candidates. $32,250 of that went toward speech coaching services.

The U.S. Government could eliminate the prospect of closing the SBA altogether by correcting the $856 million in overlapping government Social Security Disability Insurance (SSDI) and state Unemployment Insurance paid out to government employees, last year alone.

These unnecessary government expenditures are so outlandish that they would almost be funny, if we weren't the ones footing the bill. UC Santa Cruz was granted $615,000 to digitize Grateful Dead memorabilia. $593,000 went to a primate research center studying why chimpanzees throw feces. Another $147,000 went toward studying the audiences of magic shows.

The ASBL believes President Obama's move to eliminate the SBA is not prompted by a lack of funds, but by pressure from lobbyists of large corporations who want 100 percent of all federal contract dollars. The federal government has a congressionally mandated goal of awarding 23 percent of federal contract dollars to small businesses. However, because of fraud and abuse, billions of dollars in contracts earmarked for small businesses are systematically diverted to large corporations like AT&T, Dell and Apple, among many others.

The ASBL is also concerned President Obama's plans will destroy several years of documented fraud and abuse of federal small business contracting programs.

"Once the SBA and the Department of Commerce are combined, 10 years of documented fraud and abuse of small business contracting programs will be a moot point," said ASBL President, Lloyd Chapman. "U.S. Census Bureau data tells us that small businesses create more than 90 percent of all net new jobs. Closing the only agency to service the nation's 27 million small businesses where most Americans work would be economic lunacy. If Obama wants to create jobs, he should quadruple the SBA's budget, not plan to close it by combining it with the Department of Commerce."

The administration could cut just a portion of the annual excess spending and use the funds to strengthen the SBA. Dismantling the SBA by combining it with the Department of Commerce has the potential to devastate American small businesses and could cost the U.S. millions of jobs.