Small Biz Skeptical of SBA Reorganization Plan

January 18, 2012

Last Friday, President Barack Obama announced that he was elevating the head of the U.S. Small Business Administration (SBA) to a cabinet-level position and seeking authority from Congress to consolidate six government departments and agencies into one super agency. Obama will exercise his executive authority to elevate the SBA’s current Administrator, Karen Mills, to cabinet-level; however, he will need Congress’s approval to exercise  his desired “fast-track” reorganization authority.

By elevating the SBA to cabinet-level, it appears that the Obama Administration is making an attempt to reassure the small-business community that their interests and concerns will remain relevant in the new agency. However, this move is only temporary. After the reorganization is complete, SBA will lose its cabinet rank as the new department would be lead by a secretary responsible for all related commerce and trade activities. The President’s move to elevate the head of the SBA to cabinet-level was greeted with praise from many small business advocates.  His second announcement, to consolidate the SBA with five other government departments and agencies was not.

If granted the authority by Congress, the President announced that he would consolidate SBA, U.S. Department of Commerce, 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 into one department.

According to a recent press release from the White House, Office of the Press Secretary, “The President is proposing to consolidate those six departments and agencies into one Department with one website, one phone number and one mission – helping American businesses succeed. The new department will lead the development and implementation of integrated, strategic, government-wide trade effort and have a focused capacity to help businesses grow and thrive.”

Jeffery Zients, Deputy Budget Director, said that the consolidation would eliminate between 1,000 to 2,000 government jobs (through attrition), and save the American people an estimated $3 billion over 10 years.

It remains to be seen whether Congress will act on Obama’s request for fast-track legislation and an up-or-down vote on his consolidation proposal.  In the meantime, small business advocates will be anxiously awaiting details on the President’s plan including anything from a proposed timeline to SBA loan programs.

Please click here for more from NSBA President Todd McCracken.