Small Business First - Simple Solution for Economic Stimulus
Jobs, jobs, jobs. Those are the three issues that are dominating the current presidential campaign. And while President Obama and Governor Romney have vastly different views on how to create jobs, they both agree that the solution starts with small businesses. President Obama has focused efforts on reducing start-up costs and offering small business tax credits. Governor Romney is promising to reduce regulations and repeal the health care law.
Yet neither campaign has formerly embraced the idea of increasing the share of federal contracts awarded to small businesses. It’s the simplest and most foolproof way of creating small business jobs with no new taxes and no new spending. With the stroke of a pen, Congress and the President could add hundreds of thousands of new job and $11 billion to the U.S. economy by simply raising the prime small business contract goals from 23% to 25% and subcontracting goals from 36% to 40%. A small percentage increase with enormous impact.
Congress is set to vote on these provisions in the National Defense Authorization Act when it reconvenes in mid-September. They already passed the Republican-led House of Representatives, but are opposed by the Obama White House. There’s no reason this should be a partisan issue. Both parties support America's small business community. It’s simply a question of working together to ensure that the federal government puts small businesses first.
As the U.S. struggles to dig itself out of the economic downturn, it needs the help of small businesses – America’s economic engine – more than ever. The U.S. Small Business Administration and Census Bureau reports that there are over 27 million small businesses that create over 90 percent of all new jobs in the nation. Moreover, small businesses are innovators in technology and create over 90 percent of all U.S. patents and comprise 90 percent of all U.S. exporters. Small businesses are the chief job creators and are a critical component of America's economic values. Our entrepreneurial spirit is woven into the fabric of free enterprise and driven by the pursuit of the American dream - quality of life for family, community and country. Small businesses are the leaders in the world's economy and the key to financial stability.
Yet, while small businesses have significantly contributed to the economic growth of America, our government has failed to meet its small business commitment and goals year after year and failed to overcome burdensome regulatory, contracting and access to capital barriers. These hurdles impede their survival and growth. Access to contracts and capital are the two primary concerns and drivers of small business growth. Without both of these key ingredients, small businesses won’t survive in these tough economic times.
Our economic recovery depends on putting small businesses first. Congress can start by increasing the prime small business goals only 2 percentage points. This will send a message to federal and corporate acquisition officers that we mean business for America's small businesses. It won’t add to the federal deficit and won’t cost the taxpayer one extra dime. Currently, the government annually procures about $600 billion every year with about 80 percent going to large businesses and only 20 percent going to small businesses. Yet those numbers are backwards if we want to grow the economy – small businesses create many more jobs. We need a new direction that will be a boost for our nation's chief job creators.
Today's present tax structure needs to be reformed to allow businesses to generate enough capital to grow and create jobs. We need to lessen the burden of regulations, taxes and provide tax incentives to benefit our families and communities. Placing incentives and goals on the nation's corporations and banks will also encourage more contracts, loans and investments to assure that adequate financing and credit is available to spur manufacturing and expansion.
These policies are all steps in the long road to putting our economy back on track by prioritizing small businesses. But the first step is for leaders in Washington to raise prime and subcontracting goals for small businesses. Despite our differences this election year, this is a simple solution to stimulate economic growth that both parties can support.
Roger A. Campos
President & CEO
Minority Business RoundTable
1629 K Street, N.W., Suite 300
Washington, D.C. 20006
202 289-8881 office
301 254-0048 cell
MBRT is the only national organization representing CEO's of the America's Small, Minority and Women owned businesses to analyze public policies impacting their businesses