The Bailout Plan: Anti-Small Business?

As Congress, and everyone else, debates the bailout plan, one of the key considerations is just how much unchecked power it signs over to Hank Paulson, as I briefly mentioned in my post last week. There's another executive power issue that has not been widely reported. From Government Executive:

What attracted far less notice in the bill was a set of provisions that would have given Treasury Secretary Henry Paulson virtually unfettered authority to set up and run the new organization designed to stabilize the financial system—bypassing federal acquisition rules and competitive hiring procedures in the process.

Apparently there was language hidden in the bill that was rejected by the House on Monday that would have allowed Paulson to waive at will the Federal Acquisition Regulation. Among other things, FAR regulates how the federal government hires contractors and provides rules for chosing them through an open and competitive process.

This language could easily remain in the bill that the House will consider this week.

It's not entirely clear exactly why the Treasury Department would need to hire contractors to implement the bailout. Then again, almost none of the details of how the bailout would work in practice have been formulated, so that is to be expected.

The American Small Business League issued a news release claiming that waiving federal acquisition regulations would endanger the number of contracts going to small businesses. ASBL President Lloyd Chapman says that "it is clearly not necessary to suspend federal acquisition law to bail out Wall Street and the financial industry."

I admit that much of this sounds conspiratorial, and the explanation could be innocuous. So, why was this language included in the bill?