Archived: Does the US Chamber of Commerce Really Represent Small Businesses?


The US Chamber of Commerce has every reason to be proud of its many successes in forcing the Obama administration to focus primarily on Fortune 500 corporations and their desire for more tax breaks and special incentives often denied small businesses.

But, when the US Chamber of Commerce begins to use its multimillion dollar power to allegedly advocate for small businesses, small businesses should be leery. The recent passage of the thirty billion dollar Obama “small business” loan package is just one example. Most of the benefits go to large corporations and the tax credits are unlikely to benefit truly small businesses.

Another example has been the US Chamber’s role in altering the SBA’s mission of exclusively helping small businesses. During the Bush administration there were many scandals demonstrating that a quarter of scarce SBA dollars were awarded to Fortune 500 corporations and/or their subsidiaries.

Recently, despite the SBA’s deficient funding of small Community Express Loans, the SBA supported a successful big business effort that uses scarce SBA resources to fund and guarantee large business rather than small business loans. The SBA for example, just recently successfully increased the cap on SBA lending guarantees from two million to five million dollars. This occurred even though the greatest need is for loans of two million dollars or less including community express loans.

No one is clear as to how much the US Chamber of Commerce has spent in this election cycle to promote the interests of big business and Fortune 500 corporations. It is possible that it may exceed 200 million dollars, directly or indirectly, in political and lobby expenses. The chamber itself admits to raising at least 75 million dollars for the 2010 midterm election. But it denies documented charges that it uses foreign corporate money it raises from foreign chambers to promote its US political ambitions.

The Obama Administration has recently criticized the US Chamber of Commerce as to its opposition to many administration proposals. We do not concur with the Obama administration that the US Chamber of Commerce should give up its first amendment rights. However inherent in the protection of first amendment rights is transparency and the right of the public to know whose money underlies the message. Perhaps the administration should consider a non-political resolution that is far fairer to small businesses. We offer some suggestions.

First, carefully scrutinize every single so-called business proposal before congress and the administration that allegedly assists small businesses to ensure that it is a pure small business measure, not one loaded with special benefits that large corporations are best prepared to take advantage. This should include a reexamination of the more than doubling of the SBA lending cap from two million to five million dollars. Instead we should triple the dollar amount available for small loans, including Community Express Loans

Second, request that the Department of Justice secure a preliminary estimate for the year 2010 of the dollar amount spent by the US Chamber of Commerce directly or indirectly on lobbying and/or securing political contributions to small business interest including from foreign chapters.

Third, empower truly small business associations to have a seat at the table whenever the administration discusses any tax policies or any government programs that effect the business community. In June, Obama’s senior advisor David Axelrod began such an effort with the Latino Business Chamber of Greater Los Angeles. But the press of the election campaign has apparently diverted the administration from this positive effort to reach out to small businesses.

Lastly, there are too many front organizations in America that violate basic transparency rights. As a result, few know who is really speaking for particular interests. For example, political organizations masquerading as Latino organizations, have urged the Latino community not to vote in the 2010 elections. Yet, no reputable Latino organization has ever contended that a boycott of the election process is in the best interest of the Latino community. This includes the strong long time support for “Get Out to Vote” campaigns among Latino organizations such as MALDEF, LULAC, and the National Council of La Raza.

The authors are officers of the Latino Business Chamber of Greater Los Angeles.

Posted - Copyright © 2022 Eastern Group Publications, Inc.

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1 Comment

  1. Let me start saying that I agree with you. However, that does not resolve the problem. Your post does lack analysis of the problem. Unfortunately the analysis is simple and the solution is contradictorily to itself.
    First the analysis: Let us start with the conclusion. Any large organization prefer to deal with another large organization. You cannot come up with one reason why a large organization should favor to deal with many small instead of one large. It is just easier, more prestigious, the understanding for bureaucracy is similar etc.etc.
    The first solution could be to organize small business in larger organizations, association similar to trade unions. I know from experience that does not work either as the association (not unlike trade unions) becomes a separate unit with their own interest at a higher priority than the interest of the party they are mandated to represent. SBA, US Chamber of commerce or any entity with direct ties to the government are of course totally misdirected from the outset. They are part of the government and therefore large and thus their priority is to shine for the government.
    The second solution, which should work but is hindered by the fact that our political representation is manipulated by special interests, would be to shape an atmosphere, were entrepreneurs are given more freedom. Eliminate most of the restrictions allow people start up businesses with a minimum of red tape. Licenses and bonds have so far not prevented any failure or protected any consumer. A sales tax system, which has details and differences no small company can handle is another issue. The whole 1099 issue is another. You know I could fill any server with examples. The very complicated rules for obtaining capital from individuals and restrictions for who can sell shares makes the capitalization impossible without having those bureaucratic organizations like SBA directing and deciding, who is better suited to have a loan. Nice people but unfortunately they are less understanding of being an entrepreneur than most others as their real responsibility is towards the government.
    I know my comment will either not have a comment or it will be examples of how many good well meaning people are working in those organizations I am criticizing. Let my just say that I am aware of that the problem is not that there is anything wrong with the people working for those organizations. I have met many very devoted and positive people from those organizations. However, they are always directed by the ‘system’, the bureaucracy. In the end they will be forcd to decide to either change job or conform.
    Finally let me say that I am sure the US Chamber of commerce does a good job and they do represent what they naturally find being the business sector, which is not small businesses who wants to borrow $2 millions. Nobody should expect that a bureaucracy should represent a contrarian. Not all contraians are worth the support and a bureaucracy, which can select, which one is worthwhile to support is an oxymoron.

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