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President Obama Elevates SBA Head to Cabinet, Sends Mixed Signals

SBAPresident Obama announced on Friday that he was elevating Karen Mills [1], Administrator of the U.S. Small Business Administration, to be part of his Cabinet.  She already reported directly to the President.  Elevating the position to Cabinet level signifies that he considers the role important and small business important.

Or at least, that is the way it initially sounded.

However, that announcement was made at the same time as another announcement:  the President proposes combining fives agencies, including the Small Business Administration, into one.  He proposes merging the SBA with the Commerce Department, the Office of the United States Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation and the Trade and Development Agency.

The President said: “We’d have one department where entrepreneurs can go from the day they come up with an idea and need a patent, to the day they start building a product and need financing for a warehouse, to the day they’re ready to export and need help breaking into new markets overseas.”

The concern with that idea is that the mission of the SBA would undoubtedly get diluted.  Up to now the mission of the SBA has been clear:  ensure a lending source for small businesses.  By combining it with other Federal agencies, that mission would have less visibility.  It would be buried in a larger agency.

A lot of small businesses aren’t buying this proposal [2].

We’ve been fortunate that we’ve had an independent Federal agency focused primarily on small businesses and particularly small business lending.   The SBA was founded by President Eisenhower in 1953.  Its intended function?  “Aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns.”

Over the years some people (most recently, under President Bush’s administration) have complained that the SBA doesn’t contribute enough, and that we don’t even need the SBA.  But that is an equally short-sighted view.  We need one agency with the words “Small Business” in the title to remind everyone of the commitment to small businesses.

We need it focused not on the so-called high-growth startups that so many policy-makers are so enamored with, but on the mainstream small businesses that keep body and soul together in the United States.  It’s not the Startup Administration — it’s the Small Business Administration.

And we don’t need it diluted and distracted with Commerce Department concerns.  Just take a look at this statement on the Commerce Department website [3], to see what the Commerce Department is responsible for.  That department is responsible for ALL industry, here and abroad.  It’s responsible for such things as conducting the Census and monitoring the weather. Small business would soon be a mere footnote.

The SBA has been a role model the world over for how to support small businesses.  Let’s not change that now.

Big cheers for raising the SBA head to a Cabinet position. That is a great move.  But small businesses would be much better off by ditching the idea of merging it in with other Federal agencies.  Let’s keep a separate SBA.