By Roger A. Campos
Jobs, jobs, jobs. Those are the three issues that are dominating the current presidential campaign. And while President Obama and Gov. Romney have vastly different views on how to create jobs, they both agree that the solution starts with small businesses. President Obama has focused efforts on reducing start-up costs and offering small business tax credits. Gov. Romney is promising to reduce regulations and repeal the health care law.
Yet neither campaign has formerly embraced the idea of increasing the share of federal contracts awarded to small businesses. It's the simplest and most foolproof way of creating small business jobs. With the stroke of a pen, Congress and the President could add hundreds of thousands of new jobs and $11 billion to the U.S. economy by simply raising the prime small business contract goals from 23 percent to 25 percent and subcontracting goals from 36 percent to 40 percent. A small percentage increase with enormous impact.
Congress is set to vote on these provisions soon in the National Defense Appropriations Act. They already passed the Republican-led House of Representatives, but are opposed by the Obama White House. There's no reason this should be a partisan issue. Both parties support America's small business community. It's simply a question of working together to ensure that the federal government puts small businesses first.
As the U.S. struggles to dig itself out of the economic downturn, it needs the help of small businesses - America's economic engine - more than ever. The U.S. Small Business Administration and Census Bureau reports that there are over 27 million small businesses that creates over 90 percent of all new jobs in the nation. Moreover, small businesses are innovators in technology and create over 90 percent of all U.S. patents and comprise 90 percent of all U.S. exporters. Small businesses are the chief job creators and are a critical component of America's economic values. Our entrepreneurial spirit is woven into the fabric of free enterprise and driven by the pursuit of the American dream - quality of life for family, community and country. Small businesses are the leaders in the world's economy and the key to financial stability.
Yet, while small businesses have significantly contributed to the economic growth of America, our government has failed to meet its small business commitment and goals year after year and failed to overcome burdensome regulatory, contracting and access to capital barriers. These hurdles impede their survival and growth. Access to contracts and capital are the two primary concerns and drivers of small business growth. Without both of these key ingredients, small businesses won't survive in these tough economic times.
Our economic recovery depends on putting small businesses first. Congress can start by increasing the prime small business goals only 2 percentage points. This will send a message to federal acquisition officers that our government means business for small businesses. It won't add to the federal deficit and won't cost the taxpayer one extra dime. Currently, the government annually procures about $600 billion every year with about 80 percent going to large businesses and only 20 percent going to small businesses. Yet those numbers are backwards if we want to grow the economy - small businesses create many more jobs. We need a new direction that will be a boost for our nation's chief job creators.
The present tax structure needs to be reformed to allow businesses to generate enough capital to grow and create jobs. Our government needs to lessen the burden of taxes and provide tax incentives to benefit family and rural farm small businesses. The government needs to put pressure on the nation's banks to encourage more loans and investments to assure that adequate financing and credit is available to spur manufacturing and expansion.
These policies are all steps in the long road to putting our economy back on track by prioritizing small businesses. But the first step is for leaders in Washington to raise federal contracting goals for small businesses. Despite our differences this election year, this is a simple solution to economic growth that both parties can support.