Companies are often misclassified as small businesses; Americans cut back on prescriptions.

Companies are often misclassified as small businesses; Americans cut back on prescriptions.

Companies are often misclassified as small businesses; Americans cut back on prescriptions.

A summary of what's in the major U.S. newspapers.
Oct. 22 2008 6:14 AM

Small Claims

The Washington Postleads with an in-house investigation that reveals U.S. government agencies frequently misclassify a contractor as a small business. The Post examined a sample of government contracts that supposedly went to small businesses and found "at least $5 billion in mistakes" as global behemoths like Lockheed Martin and Dell were sometimes classified as "small." The New York Timesleads with a look at how Americans are cutting back on prescription drugs. While no one can say for certain, and there are several factors that could contribute to this downturn, experts attribute much of the decline to cost-conscious consumers who are having a hard time making ends meet.

USA Todayleads with news that more Democrats are voting early in several key states, which marks a change from previous elections. "This is like a mirror image of what we've seen in the past," one expert tells the paper. The Wall Street Journal leads its world-wide newsbox with a new poll that gives Barack Obama a 10-point lead over John McCain. Despite McCain's efforts to make taxes a central part of the campaign, Obama has a 14-point lead on the issue. Meanwhile, Sarah Palin's popularity continues its downward spiral. Only 38 percent of voters have a positive view of the Alaska governor, and 55 percent say she isn't qualified to be president. The Los Angeles Timesleads with the arrest of dozens of members of the Mongols biker gang in six states. The move came after a three-year investigation in which the California-based group was infiltrated by undercover agents. In what was described as an unprecedented move, prosecutors will attempt to take control of the Mongols' name, which would forbid members from wearing it. "We're going after their very identity," U.S. Attorney Thomas O'Brien said.

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Under a congressional mandate, the government should strive to award 23 percent of all contracts to small businesses. But government officials readily admit that mistakes in classification are all too frequent, leading to what are certainly exaggerated claims of how much taxpayer money actually goes to supporting small firms. Many of the problems arise when a large company acquires a small business or when a company that was once small outgrows the classification and government officials fail to update, or even check, their databases. The Small Business Administration said many of the mistakes have been caught in a report it plans to release today that will reveal small businesses got $83.2 billion from government contracts last year, which represents "about a $6 billion drop" from what federal agencies reported.

The number of prescriptions filled in the first eight months of the year was lower than the same period last year. Although the decline was minimal, it came after more than 10 years of steady growth. Some are quick to say that the downward trend might not be such a bad thing in a country where doctors are often accused of overprescribing. But, of course, there are worries that many are choosing to forgo essential medications that could be preventing major medical complications, which could lead to higher health care costs. And it's also bad news for the pharmaceutical industry, which was already bracing for the so-called "generic cliff," when several popular drugs will be losing their patents in the coming years.

The WP fronts a look at how it could take more than a year for Washington to deliver money from the $25 billion loan program to help domestic automakers develop fuel-efficient vehicles that Congress approved last month. As the industry's woes continue to mount, executives and some lawmakers say companies can't afford to wait that long and are pushing officials to release the money as quickly as possible, a message that has been echoed by both presidential candidates.

The NYT highlights financier Kirk Kerkorian's decision to start selling his $1 billion stake in Ford at a huge loss, which raised even more fears about the industry's future. Meanwhile, in a big sign of the anxiety that is swirling around Detroit's Big Three, investors haven't stepped up to finance the merger of Chrysler and General Motors. "Conditions in the industry are so perilous they are scaring away even the most fearless investors," a consultant said. Many now think it's inevitable that Detroit will ask for more federal financial assistance in the near future. "It's reaching a point where we'll have to decide if we're willing to let the U.S. auto industry fail," an industry expert said.

By now it can hardly be considered news to point out that while Obama's campaign is quick to attribute its unprecedented fundraising to small donors, the truth is that the Democrat owes much of his success to rich benefactors. But today the WP puts the number in context and points out that only one-quarter of the $600 million he has raised has come from contributions of up to $200, which is "slightly less, as a percentage, than President Bush raised in small donations during his 2004 race." Of course, Obama has more donors than Bush ever did.

In the beginning of October, Obama and the Democratic Party committees working on his campaign had a total of $164 million, while McCain and his party had $132 million. Obama holds most of the Democratic money, while the Republican National Committee holds the largest share of GOP cash. The WSJ points out that fact puts McCain at a clear disadvantage because broadcasters must charge their lowest rates to candidates but not to political parties. That is bad news for McCain because, according to a GOP strategist, it means Republicans are paying at least 25 percent more for television ads.

The WP's editorial board says that the public campaign-financing system is "badly outdated" and in desperate need of reform. When Obama decided to go back on his word and rejected public financing for his campaign—a move that "remains troubling"—he vowed to reform the system as president. "If Mr. McCain wins the presidency, he may have a motive to fix the system," declares the WP. "If Mr. Obama wins, he will have an obligation."

Daniel Politi has been contributing to Slate since 2004 and wrote the Today’s Papers column from 2006 to 2009. Follow him on Twitter.