Washington, D.C. –Today, the House Small Business Committee held a hearing examining the challenges facing the Small Business Administration’s (SBA) Office of Advocacy (Advocacy). During the hearing, Ranking Member Nydia M. Velázquez (D-NY) focused on what Congress can do to minimize the impact of regulations on small businesses while also protecting common-sense regulations that provide critical health, safety, and environmental protections.
“Federal regulations can and do benefit our economy. Regulations that protect our air and waters, boost small businesses that comprise the outdoor recreational industry, which accounted for $454 billion of our GDP in 2021,” said Ranking Member Velázquez. “The key is not to roll back all regulations that protect our health, safety, and environment but to allow Advocacy to work with agencies to recognize the impact regulations have on small businesses, and work to find ways to balance the shared goal of minimizing the burdens and achieving the goal of the regulation.”
Established in 1974, Advocacy is the independent office within the SBA that “advances the views and concerns of small businesses before Congress, the White House, federal agencies, federal courts, and state and local policymakers. The office also serves as the federal watchdog of the Regulatory Flexibility Act and advocates for small businesses with regards to regulatory issues. In FY 2022, Advocacy submitted 37 formal comment letters to agencies, held 30 roundtables, and provided RFA compliance training to 257 federal officials.
During the hearing, Major L. Clark Deputy Chief Counsel for Advocacy testified on the challenges facing Advocacy and the impact of the office on promoting the interests of small businesses.
“Because of Advocacy’s efforts to promote federal agency compliance, in FY 2022, small businesses saved $73.5 million in estimated forgone regulatory cost savings. Compliance cost savings for small businesses that resulted from these actions arose from the modification, withdrawal, or delay of final and proposed regulations,” said Deputy Chief Counsel Major L. Clark. “There were eight regulatory successes whose impacts are not quantifiable, which Advocacy categorizes as success stories.”
Members also examined size standards utilized by Advocacy, warning that they are potentially overly broad and result in the Office advocating for firms that are far bigger than the term “small business” suggests.
“Some of these small firms can have 1,500 employees and up to $47 million in receipts, depending on the industry. While they may be considered small in their sector, many of the larger firms have lawyers, accountants, and other experts who understand the rules, submit comments on rules to the agency, and help the business comply with regulations,” said Ranking Member Velázquez. “It is important to make this distinction during our discussion today and take the time to learn more about how the Office of Advocacy conducts outreach to ensure the views of the smallest of the small business are being conveyed to the agencies.”
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