Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. O. to Create Loopholes for Venture CapitalistsFrom our friends at the American Small Business League. We posted an earlier press release from them about Obama's appointment of Karen Gordon Mills as head of the Small Business Administration. The worry was that this would signal that the incoming administration would continue the practice of past administrations of channeling contracts set aside for small businesses to larger firms. This proposed change in federal contracting law indicates that those worries were justified.Obama To Create Loopholes for Venture Capitalists Petaluma, Calif. - President-elect Barack Obama is preparing to create significant changes in federal contracting law that will allow some of the nation's wealthiest investors to receive federal contracts earmarked for small businesses. Under the banner of "increasing access to capital" for small businesses, the policies will allow firms controlled by individual venture capitalist and even large venture capital firms to participate in federal small business contracting programs. The Obama Administration's new pro-venture capital policy could virtually repeal the Small Business Act for legitimate American small businesses by modifying the longstanding federal definition of a small business as "independently owned." Under the proposed Obama Administration policy, "independently owned" will be changed to include firms that are not independently owned, but are actually controlled by wealthy investors and possibly some of the nation's largest venture capital firms. Opponents of the new policy say it appears to be designed more to increase wealthy venture capitalist access to billions of dollars in federal small business contracts as opposed to "increasing access to capital" for legitimate small businesses. If the policy is successfully implemented it could force the average American small business to compete head-to-head with firms controlled by wealthy investors for even the smallest government orders for goods and services. Thousands of middle class jobs could be lost as billions of dollars in federal small business contracts are diverted to a small number of venture capitalist controlled firms. The plan will likely include a provision that would exempt the venture capitalist owned firms from capital gains taxes. The Obama-Biden Transition Team website, www.change.gov mentions such a proposal. The appointment of multi-millionaire venture capitalist Karen Mills to head the Small Business Administration (SBA) is the latest indication that President-elect Obama is moving forward with his plans to divert government small business contracts to venture capital controlled firms. The National Venture Capital Association (NVCA) and its members have been lobbying for the new loophole in federal contracting law for more than two years. The NVCA and its members have contributed millions of dollars to Obama and key Democratic leaders in Congress such as Nancy Pelosi, John Kerry, Joe Lieberman and Hillary Clinton. "The easiest and quickest way to stimulate our nation's failing economy is for the government to spend infrastructure funds with America's 27 million small businesses that create all the new jobs and employ most Americans," American Small Business League President Lloyd Chapman said. "This new Obama policy will do just the opposite and will push our economy closer to a depression by diverting billions of dollars in federal funds away from middle class America and into the hands of small number of wealthy investors that backed Obama." Labels: American Small Business League, Barack Obama, National Venture Capital Association, Small Business Administration, small businesses Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Venture Capitalist at the SBAOne of the many press releases that crowd the D&S mailbox caught our eye today and seemed worth passing along. (For a detailed look at how large corporations have horned in on small business contracts, check out Christopher Moraff's piece "The Incredible Shrinking Company" from the Jan/Feb 2006 D&S. )Obama Appoints Venture Capital Executive to Head Small Business Administration Labels: American Small Business League, Barack Obama, private equity, venture capital Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). O. Drops Windfall Profits Tax for Oil, GasFrom our friends at the American Small Business League (of which we are members, believe it or not; it was partly because of having published this article):Obama Backs Down from Promise to Institute Windfall Profits Tax Petaluma, Calif. -- President-elect Barack Obama has removed any reference of his promise to implement a windfall profits tax on the oil and gas industry from the Obama-Biden Transition Team website, www.change.gov. During the course of the 2008 presidential election, the Obama campaign called for a windfall profits tax on the oil industry as a means of subsidizing a $1,000 "emergency" rebate for consumers struggling with surging gas prices. However www.change.gov, which houses the Obama-Biden transition agenda, was recently cleansed of any mention of such a tax. The promise was displayed prominently at the top of the "economy" section of Obama's campaign website. That same information was transferred to Obama's transition website, www.change.gov, when it was launched on Thursday, November 6th. However, the language regarding the windfall profits tax was removed on Saturday, November 8th in an unceremonious and abrupt manner. (Pre-change,here; post-change, here.) While on the campaign trail, Obama made provocative statements regarding the cost of energy and its respective negative impact on American families. On May 6, 2008, Obama stated, "It isn't right that oil companies are making record profits at a time when ordinary Americans are going into debt trying to pay rising energy costs. That's why we'll put a windfall profits tax on oil companies and use it to help Indiana families pay their heating and cooling bills and reduce energy costs." With the election behind him, President-elect Obama has failed to justify the removal of the windfall profits tax from his tax plan. The subtle and unexplained elimination of this issue from the Obama-Biden agenda should concern Americans from every background. The American Small Business League (ASBL) questions whether the sudden elimination of this issue is a further indication that large corporations are already demonstrating their ability to influence the Obama Administration. "This is not the only campaign promise the Obama-Biden Transition Team has removed from change.gov; I believe that President-elect Obama owes the American people an explanation as to why these campaign promises have been pulled from his agenda." American Small Business League President Lloyd Chapman said. "With that in mind, someone from the mainstream media needs to ask President-elect Obama why these policies have been dropped." Labels: American Small Business League, Barack Obama, oil, oil and gas industry, windfall profits tax Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). |
