(Washington, DC) — Senate Committee on Small Business & Entrepreneurship Ranking Member Ben Cardin (D-Md.) today called for improvements to the U.S. Small Business Administration’s (SBA) Office of Advocacy, which was created by Congress in 1976 to act as an independent voice for small businesses within the federal government. In recent years however, small business advocates have observed that wealthy corporations have used Advocacy to “clog up the regulatory process through heavy lobbying [and] litigation, creating public anxiety by quoting huge, bogus costs.”
“It is concerning that corporate interests appear to be harnessing the Office of Advocacy to try to kill regulations,” Cardin said in his opening statement. “Congress did not create the Office of Advocacy to serve as a roadblock to agency action; it created it to ensure that agencies address the specific challenges that are unique to small businesses. When we eliminate or water down rules in the name of small businesses rather than enact narrowly tailored changes that help them remain competitive, we are doing a disservice to the very people the Office of Advocacy was meant to help.”
Cardin’s calls were echoed by Mr. Rick Baumann—the owner of Murrells Inlet Seafood, a wholesale distributor based in Murrells Inlet, South Carolina—who testified during the hearing that regulations are helpful to small business owners like him because they keep his “…harvests sustainable while also protecting threatened and endangered species…”
Mr. Bauman went on to say that important environmental regulations are too often “slowed, watered down, terminated or not even considered by Advocacy due to the lobbying of big business interests who seek to maximize their profits with no regard to sustainability or the resources.”
Click here for a video of the hearing.
Ranking Member Cardin’s full statement as submitted for the record follows:
“Good afternoon and thank you, Mr. Chairman, for convening this hearing to assess the state of the SBA’s Office of Advocacy and to learn more about how it can help ensure that federal regulations meet the needs of small businesses.
“Complying with federal, state and local regulations is among the top concerns of America’s 30 million small businesses. Poorly crafted or unclear regulations, particularly at the federal level, can create considerable financial burdens and technical challenges for small entrepreneurs, hurting their ability to grow and create jobs. Unlike large companies, small firms often do not have the time and resources to devote to complying with new rules.
“Although regulations can be harmful if they do not take the needs of small businesses into account, it would be incredibly narrow-minded to conclude that most regulations are bad for small businesses. The small proprietors I talk with tell me that rules that are well-thought out are essential for keeping bad actors out of the marketplace and for providing business stability. Moreover, many regulations have the power to help small businesses compete on an even playing field against their larger counterparts. Net neutrality is an example that comes to mind, although it remains to be seen whether this important protection will survive.
“To ensure that small business concerns are heard as agencies develop regulations, Congress created the SBA’s Office of Advocacy. The office serves an important role by educating agencies about the effect their rules may have on small firms and entities and pushing for thoughtful, targeted solutions that make regulations more manageable for small businesses.
“Unfortunately, too often big businesses seek to gain cover for their anti-regulatory agenda by hiding behind small businesses. During the last hearing we held on this topic in 2017, the President of the South Carolina Small Business Chamber of Commerce observed that big business representatives use Advocacy to “clog up the regulatory process through heavy lobbying [and] litigation, creating public anxiety by quoting huge, bogus costs.”
“It is concerning that corporate interests appear to be harnessing the Office of Advocacy to try to kill regulations. Congress did not create the Office of Advocacy to serve as a roadblock to agency action; it created it to ensure that agencies address the specific challenges that are unique to small businesses. When we eliminate or water down rules in the name of small businesses rather than enact narrowly tailored changes that help them remain competitive, we are doing a disservice to the very people the Office of Advocacy was meant to help.
“Most small businesses want to do the right thing and avoid harms like pollution and unfair labor practices. They understand the need to comply with regulations, so long as the playing field is even for everyone and that agencies are clear about what they expect small businesses to do. We have no reason to believe that these very reasonable expectations cannot be reconciled with the idea that the government should issue worthwhile regulations like the ones that keep our air and water clean and our food safe to eat.
“As we will hear from our witnesses, American small businesses are extremely diverse, and so are their needs and challenges. It is vital that the entrepreneurs who cannot afford highly paid lobbyists and trade association representatives in Washington still have an opportunity to convey their concerns as regulations are developed.
“We will hear from John Arensmeyer, the CEO and founder of Small Business Majority, which is an organization that has successfully attracted a network representing a broad cross section of America’s entrepreneurial community. Because Small Business Majority does not charge membership dues, it is able to pull in businesses with fewer resources and ones that often come from underrepresented communities. For this reason, they tend to publicizes issues that do not always get attention from the larger business groups, such as the importance of affordable healthcare and a sustainable retirement system.
“I am particularly excited to hear from Rick Baumann, the owner of Murrells Inlet Seafood, a wholesale distributor located in Murrells Inlet, South Carolina. Mr. Baumann is a successful entrepreneur who built his company from the ground up. He is also an accomplished outdoorsman who, I should point out, spent fourteen winters as a waterfowl guide on Maryland’s Eastern Shore. But what I am so impressed by is how much time and energy he spends fiercely advocating for clean water in his community and his region. He understands that the viability of his business depends on having strong protections that keep our bays and estuaries clean. He sees polluted storm water and offshore drilling not just as threats to our health, which they certainly are, but also as threats to his livelihood and to the livelihood of the people he works with every day. It is voices like his that I fear get lost when corporate interests dominate the discussions taking place around regulations and small businesses.
“While it is important to make sure agencies consider small businesses as they develop rules, it is just as essential for the federal government to provide transparent compliance guidance to help these businesses adapt once rules go into effect. That is why Congress created the Office of the Ombudsman, and I believe we should empower this office to the greatest extent possible.
“I hope that during today’s hearing we can learn what we need to do to ensure that the voices of small businesses are heard during the federal rulemaking process. We must also identify ways we can prevent wealthy corporations from using the legitimate concerns of small businesses to undermine the regulations that are there to protect us all.
“Thank you, Mr. Chairman.”