President Obama Elevates SBA Head to Cabinet, Sends Mixed Signals

SBAPresident Obama announced on Friday that he was elevating Karen Mills, 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.

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, 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.


Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.

19 Reactions
  1. I agree with this commentary. There is no way the SBA can be strengthened at the same time as it is being combined with several other agencies. Even if the head of the SBA is elevated to a cabinet position, the strength of leadership will be necessarily tempered by the loss of autonomy and an inability to respond to the unique needs of situations of our nation’s small businesses owners.

    The agency should stand on its own, the SBA administrator should be a part of the Executive Cabinet, and he or she should be in the President’s face every day on behalf of the companies that form the only solid and unwavering platform for the future growth of this nation.

    • @Donna Maria,

      Yep, leave it alone is the best advice I can give. The idea of smaller government as the reason for the change sounds good on the surface. However, there are PLENTY of other targets to get rid of, such as all these unnecessary czars we have. And there are ways to streamline government for small businesses: just don’t implement as many regulations and make the regulations simpler in terms of paperwork and complexity.

      Smaller government and less regulation doesn’t have to mean to bury our one advocate for small business issues.

      – Anita

  2. “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, 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.” (Anita Campbell, 2011). I totally agree with this statement for small business has been the main sector to truly grow business and the economy and merging it with International commerce will water down US small business strategies in addition to entangling it with the collapsing European markets. This is not good for markets that travel together could fall together in unision. Small business needs to organize but there seems to be some apathy or lack of sincere leadership for many do not realize that our survival is at stake. I have tried to work on behalf of small business in my area but still facing challenges in trying to get small business to participate more actively.

    • @Theresa,

      Well, on the advocacy issue, it’s a tough one. We certainly need a bigger voice!

      The challenge I see is that we small businesses are not homogenized milk in the sense that we all have exactly the same issues on EVERYTHING. But there are some intersection points where we do have similar issues (such as availability of funding, and an advocate who works to reduce regulations and complexity). On those things there seems to be more of an intersection of interests.

      – Anita

  3. Thanks for supplying some great information about this new cabinet position.

    When I reported on it, I wasn’t aware of the possible, “Dilution” as you call it. That’s really significant, and I’m glad you informed me of this.

    I agree; let the SBA be in the cabinet. Alone.

    The Franchise King®

    • @Joel,

      Yes, I had a similar reaction. I scanned a couple of news reports quickly and it sounded great on the surface — big booyah to President Obama on the Cabinet level elevation.

      But then I digested the rest of it, and was disappointed in the merger aspect. I sincerely hope he rethinks that proposal. If the small business community gives enough feedback, perhaps he will listen.

      I think the biggest thing is that we have to keep any opposition to the move from becoming a political football — as one side uses it as a reason to attack or jockey for position. I would like to see better commitment from Republicans and Democrats on supporting small businesses — not just talk, but action that supports mainstream small businesses. And not this fascination with venture capitalists and tech startups, but with real mainstream small businesses that run America: dry cleaners, retail stores, consulting firms, Web design firms, restaurants, consumer product inventors, plumbers, home remodelers, etc.

      – Anita

      • Anita,

        You’re right; the political football as you call it-I call it another type of game…but I’ll keep it clean , here…has to stop.

        Both sides to to grow up or go home. Without their jobs.

        The Franchise King®

  4. Thanks for bringing this to our attention. Making the SBA a Cabinet level position may not help if combined with several other agencies. A strong SBA with autonomy will help us more in the long run.

    • @Kip — agreed. If the proposal is just kept simple, with Cabinet level visibility, that would be a laudable move. – Anita

  5. Like @Anita points out in the article, the fear is the SBA getting lost in the shuffle when merged with several other agencies, all with different agendas and ideas on what is important.

    I think we can all just hope that the independence of the SBA doesn’t get swallowed up in the bureaucracy of big government.

  6. @Anita – If the SBA does get merged, do you think that the torch needs to be picked up by state governments?

  7. Anita you’ve got a great point. I think that this is the difference between not only the Government but even some private businesses really understanding what a TRUE or REAL small business is and those that are just businesses – with maybe 2,000 employees.