Oklahoma Senator Calls for Hearing to Abolish Small Business Programs

Oklahoma Senator Tom Coburn has called for a Congressional hearing to be held on April 6th to hear testimony from individuals that believe the Federal Government should eliminate programs that assist small businesses, woman-owned firms, minority-owned firms and firms owned by disabled veterans. Government officials have repeatedly denied any plan to close the Small Business Administration and end programs that have directed over $119 billion in Federal contracts and subcontracts to firms designated as small. The Senate hearing seems to indicate that rumors about Republican plans to abolish the SBA may be accurate.

Veronique de Rugy, of the American Enterprise Institute, is one of the individuals who has been called to testify. In a recent editorial on Forbes.com, Ms. de Rugy reiterated her recommendation to “abolish the SBA and get rid of subsidies aimed at small business.” Ms. de Rugy claims that the government should not be giving small firms any “special regulatory treatment or preferential access to government contracts.” What she fails to acknowledge is that small businesses are where most Americans work and where most U.S. tax revenue is derived.

“If the government ends small business contracting programs, then the $119 billion in awards currently reported as going to small firms will go to large companies which make up only 2% of U.S. employers,” stated Lloyd Chapman, President of the American Small Business League. “Small business owners need to get on the phone or on the Internet and let their Congressional delegates know that they don’t want the government to eliminate Federal programs for small business. Once these programs are gone, we will never get them back.”

The U.S. Census Bureau reports that 98% of businesses in the U.S. have less than 100 employees. According to the Bureau of Labor Statistics, firms with fewer than 500 employees accounted for 65% of private-sector net employment growth. The SBA Office of Advocacy states that small businesses employ over half of all Americans and that they create more than 50% of the American non-farm private gross domestic product (GDP). There are approximately 4 million minority-owned businesses and 6.5 million women-owned businesses in the United States, and almost all of them are small.

The first attempt to close the SBA came during the Reagan administration. Later, Republican members of Congress proposed legislation to close the SBA in 1995. Immediately upon taking office, the current President Bush removed the SBA Administrator from a cabinet level position; has cut the SBA budget and staff for six consecutive years and has proposed cutting it for nine consecutive years.

About the ASBL
The American Small Business League was formed to promote and advocate policies that provide the greatest opportunity for small businesses – the 98% of U.S. companies with less than 100 employees. The ASBL is founded on the principle that small businesses, the backbone of a vital American economy, should receive the fair treatment promised by the Small Business Act of 1953. Representing small businesses in all fields and industries throughout the United States, the ASBL monitors existing policies and proposed policy changes by the Small Business Administration and other federal agencies that affect its members.