Less Than 1% of Stimulus Funds Allocated to Middle Class Firms

/PRNewswire/ -- According to the U.S. Census Bureau, 98% of all U.S. firms have less than 100 employees. Approximately 25 million firms fall into that category. These firms employ over 55% of the private sector workforce and are responsible for over 95% of all new jobs created in America. (www.asbl.com)

The American Small Business League (ASBL) has found of the $2.7 trillion that has been allocated so far to stimulate the national economy, only $21 billion, or less than 1% of the funds have directly gone to small businesses. (http://tinyurl.com/mfzfp7)

The remainder of the funds that were allocated to businesses wound up in the hands of the top 1% of U.S. firms. President Obama has promised to create up to 4.1 million jobs. Census data indicates the top 1% of U.S. firms have not created one net new job since 1977.

There is evidence to suggest the economic stimulus plan is actually harming small businesses. The Wall Street bailout bills were touted as being essential to increasing access to capital for small businesses. Some of the firms that received billions in federal tax dollars are actually cutting access to capital for small businesses. A story in BusinessWeek reported that JPMorgan Chase, one of the largest recipients of the bailout funds, reduced the flow of credit lines for small businesses. (http://tinyurl.com/ou7j79)

Section 107 of the original Wall Street bailout bill gave the Treasury Secretary the power to waive any provisions of the Federal Acquisition Regulations (FAR) he chooses. Paragraph 9 (b) of the bill specifically mentions the waiver of "any provision of the Federal Acquisition Regulations pertaining to minority contracting" and the waiver of provisions pertaining to "woman-owned businesses."

The Obama Administration is supporting a new bill in Congress that could dismantle existing federal economic stimulus programs for small businesses by changing the federal definition of a small business. The new definition will allow many of the nations wealthiest venture capitalists to take billions of dollars in federal contracts previously earmarked for small businesses.

In February of 2008 President Obama stated, "It is time to end the diversion of federal small business contracts to corporate giants." To date, the President has refused to adopt any policy to honor that campaign promise. A series of federal investigations discovered that billions of dollars in federal small business contracts are being diverted to Fortune 1000 firms.

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Large Employers Strongly Oppose New Taxes On 161 Million American Workers' Health Benefits

/PRNewswire / -- The National Business Group on Health (NBGH) issued the following statement regarding proposals from some policymakers that would increase taxes on American workers' health benefits to finance health reform. NBGH represents 300 large employers - including 60 of the Fortune 100 - providing health benefits to over 55 million Americans:

"With our nation reeling from the worst economy in generations, the idea that now is the time to increase taxes on 161 million American workers' health benefits boggles the mind.

"We have serious concerns that modifying the tax exclusion of health benefits could have the unintended consequence of driving the cost of health benefits higher and potentially force businesses and/or workers to drop private coverage altogether. In particular, modifying the tax exclusion for health benefits could have a disproportionate impact on older workers and Americans residing in states with comparatively low costs of living or more efficient health care systems.

"As a vocal and steadfast advocate of comprehensive national health care reform, NBGH strongly supports bipartisan efforts to expand coverage to all Americans and make the hard choices around delivery system and payment reforms that would eliminate the hundreds of billions of dollars spent annually on care that is wasteful, duplicative, and even harmful."

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Obama Dropped Small Business Stimulus Plan Days Before the Election

/PRNewswire-USNewswire/ -- Just days before the election, President Barack Obama dropped a comprehensive plan to stimulate the middle class economy by stopping the diversion of federal small business contracts to corporate giants. The plan was drafted over the course of three months by dozens of small business experts around the country who had been invited to serve on President Obama's small business advisory panel.

The plan included a number of policies that would have redirected up to $100 billion a year in federal small business contracts back to legitimate middle class firms around the country.

Since 2003, a series of over 15 federal investigations found Bush Administration officials allowed billions of dollars in federal small business contracts to be diverted to Fortune 500 firms, their subsidiaries and thousands of large businesses in the United States and Europe.

A report issued by the Small Business Administration (SBA) Office of Inspector General (OIG) referred to the diversion of federal small business contracts to large businesses as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today." (http://www.sba.gov/IG/05-15.pdf)

President Obama responded to the investigations in February of 2008 with the statement, "It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

The plan included support for a new piece of draft legislation written by the American Small Business League (ASBL) titled the Fairness and Transparency in Contracting Act. The new legislation would prevent government contracting officials from awarding small business contracts to Fortune 500 firms and other large businesses. The ASBL estimates the new legislation would provide a dramatic boost to the nation's failing economy by redirecting up to $100 billion a year in federal infrastructure funds to middle class firms.

As opposed to other stimulus plans that could cost taxpayers hundreds of billions of dollars, the Fairness and Transparency in Contracting Act would be virtually free to taxpayers.

In December President Obama's transition team stated that up to 40,000 jobs could be created with every billion dollars spent on federal infrastructure projects. (http://www.nytimes.com/2008/12/07/us/politics/07radio.html?_r=1) If calculations by President Obama and the ASBL are correct, the Fairness and Transparency in Contracting Act could create over 4 million new jobs at virtually no expense to taxpayers.

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