In a bid for leaner government, President Barack Obama has called for Congress to grant him powers held by former presidents to merge the Small Business Administration, the U.S. Trade and Development Agency, the Export-Import Bank, the Overseas Private Investment Corporation and the U.S. Department of Commerce. The goal is to increase efficiency and lower costs in government and many organizations support the move, but some are worried small businesses may lose personalized services as they get overshadowed by larger issues among the merged agencies. Others argue the plan sounds positive, but that the translation into action may cause confusion and lost benefits rather than help constituents. For more on this continue reading the following article from Blue MauMau.
President Obama announced yesterday an initiative to merge commerce-related departments of the federal government into one entity and to promote the Small Business Administration head to Cabinet member. Franchisor and franchisee advocates are generally positive about the move.
Using his executive authority, he took the first step in promoting the head of the U.S. Small Business Administration, Karen Mills, to White House Cabinet Secretary, alongside the Secretaries of the Treasury, Labor, Defense and others. At the same time, the President is asking Congress to grant him the authority to merge at least six entities into a single department.
President asks for congressional authority to merge government agencies
President Obama said to a gathering of business advocates in the East Room of the White House that the initiative would shrink government and save dollars. The White House's plan is to take six major agencies — the U.S. Department of Commerce, the Small Business Administration, 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 — and merge them into a smaller, single trade department. The SBA's administrator, Karen Mills, will head up the new department once it is approved.
"I am calling on Congress to reinstate the authority that past Presidents have had to streamline and reform the Executive Branch," stated President Obama. "I will only use this authority for reforms that result in more efficiency, better service, and a leaner government," he added.
The announcement followed up on last year's State of the Union address in which the President observed that it had been more than a half century since the last major reorganization of the sprawling trade agencies. He stressed how confusing and difficult these entities were to businesses and consumers. "The Interior Department is in charge of salmon while they're in fresh water, but the Commerce Department handles them when they're in saltwater," he joked in his address. "I hear it gets even more complicated once they're smoked."
"The goal of the policy is commendable," said the president of the American Association of Hotel Owners Association, Fred Schwartz. "As an association of small business owners, we always support streamlined and more effective government. We are certainly encouraged by this announcement." AAHOA members, largely franchisees, own some 40 percent of all hotel properties in America. AAHOA's president cautioned that his association would not be able to officially support any legislation until it is introduced into Congress and his organization has fully reviewed the specific language.
Keith Miller, chairman of the Coalition of Franchisee Associations, agrees that the President' s words are encouraging. "However, words must be translated into action. Franchisees invest in and create jobs in our local communities and need an environment that encourages them to make that investment," he says. The CFA includes AAHOA and store owners from such brands as Burger King, Subway, Little Caesars, Meineke, and 7-Eleven, to name a few.
SBA head promoted to cabinet member
Senator Olympia Snowe (R-Maine), a ranking member of the Senate Committee on Small Business and Entrepreneurship, thinks elevating the SBA Administrator to Cabinet level is the right move. "It is absolutely essential the head of the SBA have a seat at the Cabinet table with the President," Snowe declared. "I've urged this change numerous times in personal conversations with the President, and as I wrote in a December 2008 letter to President-Elect Obama, 'this designation will send a clear signal that small business will drive our nation out of this recession.' "
Steve Caldeira, CEO of the International Franchise Association, which is located on K Street in the nation's capital, agrees with the decision to promote the head of the SBA. But his concern with the change is access to SBA loans. In response to the news Caldeira said, "Small business access to credit is the number one challenge facing prospective and existing franchisees and any steps that will enhance small business access to credit will help to boost our economy and create the jobs our country so desperately needs." Caldeira, a recipient of the U.S. Department of Commerce and the International Trade Administration's Peace-Through-Commerce Award, which he was awarded for helping American franchisors that want to sell franchise licenses abroad, emphasized: "As part of any proposed reorganization, it would be essential that SBA loan programs remain intact and at their current funding levels, to ensure franchise small businesses can continue to access capital through these successful loan programs."
But CEO John Arensmeyer of the Small Business Majority stressed that small business issues could be drowned out by big business concerns when the Department of Commerce and the Small Business Administration are merged. Business reporter and blogger Robb Mandelbaum of the New York Times quoted Arensmeyer saying: "Right now small business has an independent agency that reflects its needs. The obvious concern is that by bringing this into a larger agency there's a risk that some of that voice gets lost. We know that government is held in very low esteem by small business, but the SBA is an exception to that right now."
The White House will soon unveil a new website, BusinessUSA, which will act as a single portal for business information.
The House of Representatives will reconvene from its holiday on Tuesday, while the Senate will convene on the 23rd. The President's State of the Union address is scheduled for January 24.
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