The debt load weighing upon this nation is so crushing it takes your breath away.
New estimates based on President Barack Obama’s 2012 budget reveals that interest payments on the national debt will quadruple in the next decade. Every man, woman and child in the United States will be paying more than $2,500 a year to cover a spending spree by this administration that makes drunken sailors blush.
According to news reports, starting in 2014, net interest payments will surpass the amount spent on education, transportation, energy and all other discretionary programs outside defense. In 2018, they will outstrip Medicare spending. Only the amounts spent on defense and Social Security would remain larger under the president's plan.
The president should get kudos for appearing like he’s trying to balance the budget by 2017. But net interest payments that year are expected to reach $627 billion, up from $207 billion in the current fiscal year. And this doesn’t take into effect the inevitable increase in interest rates which will blow this projection to smithereens.
So to address our debt crisis, besides cutting expenses, we must increase our tax base. The smartest and quickest way to increase tax revenue is to help small businesses hire and therefore add millions more to the tax rolls. After all, 75 percent of all new jobs in the past decade have been created by entrepreneurs and small businesses. They are the backbone of this nation.
For a brief time, it appeared like Obama was starting to pay attention to small business. Words often are not followed by action.
The Small Business Administration (SBA) is looking at a 45 percent decrease in funding. The SBA budget is slated for $985 million for 2012, which reflects a sharp decline from the $1.8 billion the SBA received in 2010. Much of the SBA funding was based on $962 million in supplemental stimulus appropriations that were designed to help boost small-business loans. Those appropriations will stop in 2012.
As a reminder, the SBA provides vital loan guarantees for small businesses that banks are unwilling to underwrite. A SBA-guaranteed loan is often times the only source of funding. With less money to lend, more small businesses will have fewer resources. Many will cease to exist.
Adding to a lack of financial resources, people looking for guidance to start up new venture, the budget for the Small Business Development Centers (SBDC) will be slashed by $7 million. Although not widely known, SBDC’s mission is to provide management assistance to current and prospective small business owners. SBDC’s are a one-stop-shop providing a wide variety of information and help.
The program is a cooperative effort with the private sector, educational community and federal, state and local governments. These centers are critical for mentoring small business owners and supporting their entrepreneurial dreams.
If there is any silver lining for small business, it’s that extra money is being set aside for export assistance. According to the Department of Commerce, for every dollar invested into export promotion, more than $350 of exports is realized. This is encouraging as our exports dollar for dollar pay 17 percent higher wages and employ five times more people than our imports.
The new budget proposes a 15.7 percent increase for the International Trade Administration (ITA) which promotes and protects U.S. exports and supports Obama’s commitment to double exports in five years.
Some of that funding, according to news reports, would come from an estimated $20 million in savings from restructuring the ITA to focus on high-priority markets and industries, including relocating foreign commercial service officials to China.
If we were truly serious about getting our house in order we would consolidate the 22 overlapping federal agencies in Washington that manage America’s international trade relations. The savings from duplications would be mind boggling. We would have a clear and concise voice. We would unlock millions of dollars to invest in our export infrastructure while reducing the size of government.
As an entrepreneur and exporter, I keep getting mixed signals from this administration. As an entrepreneur, I am concerned about growing taxes, healthcare and energy costs, and access to capital. As an exporter Obama talks big about expanding exports and even throws some additional money at it. This new budget has nothing to help me reconcile the two.
What’s missing is true bipartisan commitment to creating U.S. jobs by supporting small business. The jobs discussion has been put on the back burner. Yes, our budget is in shambles, but putting people back to work restores hope and responsibly grows our tax base. There is no other way to significantly reduce our deficit.
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