It’s not often that a Senate oversight hearing provokes claims
of bigotry and anti-Americanism. But that happened recently when
Senator Tom Coburn called a hearing to examine the effectiveness of
the Small Business Administration.
Before he had even formally announced the hearing, Senator
Coburn, a man who has cut thousands of umbilical cords in his
career as a family doctor, found himself under fire for
scrutinizing the proverbial umbilical cord that links the SBA to
the U.S. Treasury.
A number of supposed small business advocacy organizations
impugned the Senator’s intent and attacked some of the witnesses.
Some claimed that he was trying to abolish the SBA. One group went
so far as to call an SBA critic, the estimable Veronique de Rugy, a
“French Anti-American small business advocate.” Another group
labeled SBA critics “bigots.”
Why did supposed advocates of small business respond to the
hearing with such vitriol? What did they hope to gain by making
themselves so conspicuously nasty?
Senator Coburn suggested that the angry response was indicative
of some serious problems at the SBA and he called for additional
oversight to figure out what’s gone wrong.
The senator may have a point. There may be serious problems with
how SBA funding is structure that can be brought to light through
additional oversight.
But there are much bigger issues at play.
Like many government agencies, the SBA proudly trumpets its
track record on job creation. Superficially, there is nothing wrong
with job creation, though when the government does it, it leads to
unintended problems. When the government creates jobs, it also
creates workers dependent on the government.
Whether they are in the public or private sector, these
government-supported workers become de facto lobbyists dedicated to
defending the existing funding level and prying more dollars out of
Uncle Sam’s wallet. This makes it exceedingly difficult to provide
real scrutiny of government programs and makes eliminating
programs, even unnecessary ones, seemingly impossible.
Senator Coburn’s hearing demonstrated this dynamic. The groups
that responded loudly and aggressively were those that profit from
the government’s largesse, not the advocates of the broad interests
of small businesses like the National Federation of Independent
Business. These narrowly-focused interest groups care more about
profiting from the government than of entrepreneurialism.
Because they react so vociferously, many members of Congress are
afraid to take on these niche industries. The reward of a smaller
government does not appear to outweigh the costs of the inevitable
negative attack campaign. But that does not mean Congress should
give up on limited government or programmatic oversight.
Rather than eliminating unnecessary programs individually and
taking on their beneficiaries directly, Congress might consider a
broader mechanism to limit spending. A Constitutional balanced
budget amendment or a budget cap with teeth would force special
interests groups that feed off of government handouts to compete
against one another for limited government resources.
This would not be a panacea, but it would provide a glimmer of
hope for those who believe the government should be smaller and
less involved in the economy, and it would probably make for more
entertaining hearings to boot.
