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SBA Bureau’s Dedication to Small Business is Under Fire

By | 03.21.13

SBA Bureau’s Dedication to Small Business is Under Fire

The Office of Advocacy is a subsidiary of the U.S. Small Business Administration, one that functions largely behind the scenes to represent the interests of small businesses.  More specifically, the Office of Advocacy is supposed to convince federal agencies to carefully consider the impact of proposed regulations on small businesses.  In a rule-making system where the largest companies tend to receive the bulk of the attention, the Office of Advocacy’s perceived role has become increasingly scrutinized.

The Office has recently come under fire from some organizations which accuse it of deliberately involving big business in what should be small business affairs.  One of these critics is the Center for Effective Government, an organization which claims that the Office of Advocacy invited a lobbyist for General Electric–one of the largest corporations in the U.S.–to attend a 2011 forum on labor safety.

Concerns about large corporations butting in to small business advocacy organizations extends to the entire SBA.  The administration has been criticized in the past for allowing big business to secure government contracts and federal loans that some believe should have gone to small businesses.

In 2010 and 2011, the Office of Advocacy opposed regulations on three potentially hazardous chemicals, citing the negative effects that the regulations would have on small businesses as its primary motivation.  However, documents discovered by the Center for Effective Government suggest that the Office of Advocacy was actually working very closely with trade groups such as the American Chemistry Council.  “No small businesses objected to the scientific assessments or asked the Office of Advocacy to intervene in the cancer assessments,” reported Center for Effective Government director of regulatory policy Randy Rabinowitz.

Taking a wider view of the Office of Advocacy’s function, some critics have accused the bureau of supporting regulatory changes that benefit all businesses, instead of just small businesses.  In response to this charge, Office of Advocacy spokesman Brad Howard said “Our sole focus and Congressional mandate is and always has been on minimizing the burden on small business.  Occasionally, these alternatives benefit everyone.”

It is difficult to determine exactly how much effect the Office of Advocacy has on the passage or defeat of any one regulation, but the office claims to have saved small businesses over $88 billion in first-year compliance costs alone since 2002.

Source:

Mandelbaum, Robb. “A Small-Business Office is Accused of Advocating for Big Business.” The New York Times, 3/18/13.

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