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Why is the Media Helping Obama Close the Small Business Administration?

Over the last few months I have put out dozens of press releases and blogs sounding the alarm that President Obama was going to close the Small Business Administration (SBA) by combining it with the Department of Commerce. I predicted he would do that in November of 2008. I reiterated that prediction in several national television appearances.

In January of 2012 he proved me right and announced his plan to do exactly that.

Not one journalist in America ever contacted me and asked me how I knew he would do that over three years before he announced it.

When Ronald Reagan tried very aggressively to close the SBA and end all federal programs to help small businesses, his plan to close the SBA was to combine it with the Department of Commerce.

Not one journalist has ever mentioned that Obama’s plan to combine the SBA with the Department of Commerce was the exact plan that Reagan proposed to close it.

President Obama is constantly talking about the need to create jobs in America; he is continually talking about the importance of small businesses in America. He has even acknowledged that small businesses are responsible for the majority of new jobs in America.

He’s right. Data from the U.S. Census Bureau tells us America’s 28 million small businesses are responsible for over 90 percent of the net new jobs in America, over 50 percent of the private sector work force, over 50 percent of the GDP and over 90 percent of all U.S. exporters. Small businesses are the undeniable, irrefutable engine of economic growth and job creation in America. Now President Obama is proposing to close the one and only measly little federal agency in our whole government to help American small businesses that create all the new jobs.

This fact has gone totally and completely unreported in the mainstream media. Why?

Not one journalist has ever mentioned that every year of the Obama administration, the SBA Inspector General Peg Gustafson, that he appointed, has found billions of dollars a month in federal small business contracts that by law should go to small businesses are actually going to some of the largest corporations in the world. No journalist has reported that Inspector General Gustafson has named the diversion of federal small business contracts to corporate giants as the number one problem at the SBA for every year of the Obama administration.

Let’s talk about some of the facts about President Obama’s plan to permanently close the SBA or as he and the media prefer to call it, “streamlining government” or “combining agencies.”

His one and only justification for closing the SBA is to save $300 million a year. First of all, he has provided no details on exactly how that will be accomplished. Second, $300 million a year is statistically insignificant in terms of the overall federal budget. The SBA budget is a mere .001 percent of the Pentagon budget.

No journalist has ever mentioned that fact in any story about President Obama closing the SBA.

The Pentagon’s own auditors have found the Pentagon cannot account for 25 percent of their $700 billion annual budget. If you break that down to a 40-hour workweek, which means the Pentagon loses more money every morning before lunch than President Obama is proposing to save in a year by closing the SBA. It also means that the Pentagon misplaces enough of our hard-earned tax dollars in a day to run the SBA for a year.

No journalist has ever mentioned that fact in any story about Obama closing the SBA.

While President Obama claims he can save $300 million a year by closing the SBA, he is also proposing to spend $7 BILLION to build power plants in Africa under his power Africa program. That would fund his $300 million annual savings by closing the SBA for over 20 years. It would fund the SBA at its current budget for almost a decade.

No journalist has ever mentioned that fact in any story about Obama closing the SBA.

Now let’s take a look at some more facts and realities of president Obama’s plan to close the SBA by combining it with the Department of Commerce. In case you don’t know, the Department of Commerce is the total and complete opposite of the SBA. The agency represents the interests of the largest corporate giants in America. Combining the SBA and the Department of Commerce would be like combining the KKK and the NAACP.

Since every SBA Inspector General for over NINE YEARS has named the diversion of federal small business contracts to corporate giants as the most rampant problem at the SBA, does it make any sense to combine the SBA with the federal agency that represents those very same corporate giants?

The corporate giants that are represented by the Department of Commerce are the very firms that have been lobbying to close the SBA since Reagan was President. Does any one actually believe a great solution to the rampant fraud and abuse at the SBA is to combine the SBA with the federal agency that represents the very corporate giants that 100 percent of the investigations have found have been hijacking federal small business contracts for a decade?

No journalist has ever mentioned that fact in any story about Obama closing the SBA.

Let me wrap up with the truth about why President Obama wants to close the SBA. You will never hear or see this in any story in the mainstream media.

President Obama will close the SBA because that is what the corporate giants that he and most of the other politicians in Washington work for want. Fortune 500 firms own our government, they are the major funders of political campaigns for national office, they fund the army of lobbyists that infest our nation’s capital and they own all of the major media outlets in America.

Federal law mandates that a minimum of 23 percent of all federal contracts go to small businesses and that all government prime contractors must award 23 percent of their subcontracts to small businesses. A long series of federal investigations have found in reality most federal small contracts have fraudulently been awarded to corporate giants. The SBA’s own information shows last year 235 Fortune 500 firms received federal small business contracts. Information obtained with the Freedom of Information Act for over a decade clearly indicates the nation’s largest prime contractors have fraudulently falsified their compliance with their 23% small business contracting goals.

Under section 16 (d) of the Small Business Act, misrepresenting a firm’s status as a small business is punishable by up to 10 years in prison, a $500,000 fine per occurrence or both. Federal law titled “Liquidated Damages” requires that any prime contractor that fails to make a good faith effort to reach their small business goals shall pay a penalty in the amount of the deficiency.

It has been well documented that Fortune 500 firms have been the actual recipients of most federal small business contracts for over a decade and that most federal prime contractors have falsified compliance with their congressionally-mandated small business contracting goals. Now one of two things will happen.

Either the rampant and well-documented fraud and abuse in federal small business contracting programs will need to be investigated and the guilty parties will be prosecuted and face prison terms and billions of dollars in penalties or the SBA can be permanently closed as Ronald Reagan proposed by combing it with the Department of Commerce and all the problems for the Defense and Aerospace Industry will disappear. Obama has chosen the latter.

These are the irrefutable facts about the real reason Obama is closing the SBA that you will never see or hear from even a single member of the corporate owned mainstream media.

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