Small Business, the SBA and the Kids’ Table

by | US Economic News

Remember the kids’ table at family holiday dinners? That’s where you were exiled until something – an illness, geography, the passing of an elderly family member, etc. – created an opening at the adult table. Heck, I didn’t make the adult table until I was 35.

The federal government is thinking about sending a message to the small business community and how you feel about it depends on how likely you think it is that you might be sent back to the kids’ table.

As part of the recently announced push to make government more streamlined and efficient, trim the deficit and grow the job base, the President proposed that six federal agencies, including the Small Business Administration, be merged into one all-inclusive trade department to be led, at least temporarily, by current SBA administrator Karen Mills.

Certainly the appointment of Ms. Mills to a cabinet level post would seem to be good news for small business supporters. She has a solid track record of cutting paperwork for small business lenders, and ensuring that small businesses get a fair shot at government contracts.

“For the entrepreneurs and small business owners that SBA and other agencies serve, this is very good news,” said Ms. Mills in an SBA media release. “A more integrated approach would ensure that small businesses would have access to all of the federal government’s programs in a more seamless, coordinated, and coherent way.”

At a broader perspective, the notion of cutting costs by combining these six agencies (the others are the Commerce Department, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency) is likely encouraging to anyone worried about the non-stop growth of government.

That all sounds good, but small business lobbying groups are worried. The concern is that a single agency charged with assisting both small, growing businesses and large, established corporations will devote most of its attention to the bigger players. They argue that this would effectively trample the already limited voice of small business.

Todd McCracken, president of the National Small Business Association reacted to the announcement by stating that, “such reorganization could minimize the emphasis placed on small business by the federal government and lead to an even greater imbalance toward promoting the interests of large businesses over those of small business.”

Kids’ table, here we come.

Nothing against the Intels and Microsofts of the world – those are great enterprises. But companies with less than 20 workers employ more than 21 million Americans and companies with fewer than 100 workers employ another 20 million. That’s roughly a third of all working Americans, and doesn’t even count the millions of one-person shops made up of self-employed individuals.

The proposal, which the White House indicates would save more than $3 billion over ten years, would require Congressional approval. The President requested that Congress guarantee an up-or-down vote within 90 days. Republicans like parts of the proposal, but appear reluctant to grant fast-track authority.

Small businesses face numerous challenges in the current economy: burdensome regulation, tightening credit, and uncertainty over health care reform, to name just a few. It remains to be seen whether sincere proposals to assist small businesses will follow the recent structural and personnel announcements.

Stay tuned.

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