The American Small Business League (ASBL) is predicting President Obama will use the government shutdown as an excuse to permanently shutdown the Small Business Administration (SBA).

Ronald Reagan tried to close the SBA by combing it with the Department of Commerce. Obama has resurrected Reagan’s exact same plan to close the SBA by combing it with the Department of Commerce.

In February of 2008, President Obama released the statement “It is time to end the diversion of federal small business contracts to corporate giants.”

Not only has President Obama refused to keep his campaign promise to the nation’s 28 million small businesses, the diversion of federal small business contracts to corporate giants has jumped significantly during the Obama Administration.

Every year of the Obama administration, the SBA Inspector General has named the diversion of federal small business contracts to corporate giants as the most significant problem at the SBA.

In July, the SBA claimed $89.9 billion in federal contracts were awarded to small businesses last year. Using the Freedom of Information Act, the ASBL obtained the names of all the firms the SBA had included in those statistics. The data revealed that the SBA had included contracts to 235 Fortune 500 firms in their $89.9 billion number.

In an investigative report by CBS, the SBA claimed 235 Fortune 500 firms had received billions in federal small business contracts accidentally through, “simple human error.” They were unable to explain why the alleged errors always diverted small business contracts to Fortune 500 firms.

The Government Accountability Office investigated an SBA-managed small business program and released Report 10-108 which essentially accused SBA executives of encouraging fraud. The report stated, “By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud.”

In November of 2008, ASBL President Lloyd Chapman predicted President Obama would close the SBA in the very same manner Ronald Reagan proposed, which was by combining the SBA with the Department of Commerce.

President Obama announced his plans to do exactly that in January of 2012.

A series of federal investigations and investigative reports have all uncovered widespread fraud at the SBA.

The ASBL believes President Obama’s true motivation for closing the SBA is to obscure the rampant fraud that has gone on at the agency during his administration.

President Obama’s rational behind closing the SBA to save $300 million a year seems disingenuous and illogical since the SBA budget is a mere .001 percent of the Pentagon budget. Pentagon auditors found the Pentagon cannot account for 25 percent of their $700 billion annual budget and President Obama has announced plans to spend $7 billion of our tax dollars to build power plants in Africa.

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