Will Obama Reorganization Plan Be a Boon to Small Businesses?

By Carol L. O’Riordan

On January 13, 2012, President Barack Obama announced a proposed major government reorganization that would combine the Small Business Administration with five other agencies to create a new, yet unnamed umbrella agency that handles issues of commerce and trade.

This step requires the approval of Congress, which at this point appears to be a difficult though not impossible hurdle.

The reorganization plan would combine components of the Commerce Department with the SBA, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency.

Another thing that the President did at the same time that is effective immediately, without congressional approval, was to elevate the Small Business Administrator, Karen Mills, to Cabinet rank.

What do these steps actually mean for small business? For years, the Obama administration has declared that small business is a major priority in its economic program, yet small business leaders haven’t always been convinced.

The Wall Street Journal has reported that the new Cabinet status might have been designed as a trade-off to small business in view of the possibility that this sector will ultimately lose out in the reorganization, if it takes place, because small business would no longer have a separate agency to look out for its interests. Should the major reorganization be approved, the SBA chief will lose the cabinet status that she was just granted.

National Small Business Association NSBA President and CEO Todd McCracken, in a statement issued immediately after the President’s announcement, expressed only guarded optimism.

“On the one hand, reorganizing federal agencies to create a ‘one-stop-shop’ for America’s small businesses could streamline processes and make accessing information and assistance much easier,” McCracken said. “On the other hand, such a 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.”

So small business and its advocates, we believe, need to take a wait-and-see attitude regarding the possible reorganization, and to be vigilant that small business’s interests are protected, should the plan eventually take effect.

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