President Barack Obama today announced that the head of the U.S. Small Business Administration, Karen Mills, will be the newest cabinet member.
He made the announcement that the SBA would become a cabinet-level agency in front of small-business owners at the White House. The head of the SBA was a cabinet-level position under the Clinton Administration.
The announcement was part of a larger proposal that would combine the SBA with five other government agencies that focus on business and trade.
Those organizations include the Commerce Department's core business and trade functions; the Office of the U.S. Trade Representative; the Export-Import Bank; the Overseas Private Investment Corporation; and the Trade and Development Agency.
These agencies combined would, according to Obama, create a more efficient climate for business development and entrepreneurship. In addition, according to AP, the merger would save the federal government $3 billion over 10 years by eliminating duplicate costs and human resources.
Barry Sloane, CEO of the Small Business Authority, applauded the move. "I think it's constructive for two reasons," he told CNBC.com. "By doing this, Obama is making a statement that small business is important. And, he's making good on his promise of reducing overlapping agencies, which will reduce government spending."
The proposal to merge the agencies must be approved by Congress. If the merger is approved, the SBA would no longer be in the cabinet.
Sloane the SBA has been an engine for recovery from the recession. "Under the Obama Recovery Act, he increased loan size from the SBA from $2 million to $5 million, and increased the amount of government guarantee on those loans, which has been helpful to business owners. This proposal is another acknowledgment of the importance of small business."
House Small Business Committee Chairman Sam Graves (R-MO) said in a statement today that "I look forward to examing the [proposed merger] further, and I hope the President will work very closely with Congress before finalizing any changes."
While he was non-committal on whether he would vote to approve the changes, he said: "Decreasing the size of government and reducing bureauracy is something that I support in principle, however, it is important that any effort to make significant changes to federal commerce and trade programs be done carefully, and in a way that protects America's small businesses."