Big Business Agenda From an SBA Small Business Advocate?

Arguing that Obama’s administration has been soft on regulation is a hard sell to many in the business community. Photograph by Getty Images

There’s an unusual degree of heat landing this week on an obscure federal office that’s charged with making sure small businesses aren’t unduly hampered when the government writes new regulations. Two reports from Washington nonprofit groups Tuesday said the agency, the Small Business Administration’s Office of Advocacy, is actually taking cues from big business.

The accusations are one sign that progressives who favor stricter rules protecting consumers, workers, and the environment want to pressure the Obama administration in its second term. Arguing that Obama’s administration has been soft on regulation is a hard sell to many in the business community who fought the Affordable Care Act health reform and the Dodd-Frank financial reform laws. On the other side, activists see a White House that’s too deferential to industry and point to such examples as the BP oil spill and the financial crisis to make the case for more government oversight in the marketplace. It’s a tension that exists in every administration.

One of the reports, from the Center for Progressive Reform (pdf), says the office “has quietly become a highly influential player in the federal regulatory system” that uses its authority to delay rules. The other, from the Center for Effective Government, focuses on the Office of Advocacy’s comments on the cancer risks associated with such chemicals as formaldehyde and styrene. The report notes that Advocacy officials met with chemical industry trade groups and backed their conclusions in comments to regulators. (Both groups favor tighter regulations, and the Center for Effective Government counts labor unions among its funders.) The Office of Advocacy wouldn’t comment on the reports, spokeswoman Jody Wharton said in an e-mail.

The Office of Advocacy by law is charged with representing—advocating for—small business interests. Those will sometimes overlap with big business interests, and sometimes they will diverge. Much of its work is so obscure that you can’t understand it unless you’re deeply involved in the details of a regulation. It’s up to the Office of Advocacy to avoid letting its mission drift or to prevent other interest groups from hijacking its small business agenda. Its current chief, Winslow Sargeant, was appointed by President Obama and confirmed by the Senate.

Tom Sullivan, who led the office during the George W. Bush administration, says the critiques misunderstand what the agency is meant to do. He points out that the laws that give Advocacy its authority were “signed by Carter, Clinton, and Obama,” not exactly a far-right cadre. The agency naturally tangles with such arms of the federal government as the Environmental Protection Agency or the Occupational Safety and Health Administration over how rules weigh the interests of workers or the environment against the burden on businesses to comply with rules. Agencies are “trying to both minimize impact on small firms and achieve the regulatory outcome,” says Sullivan, now an attorney and lobbyist who runs the Small Business Coalition for Regulatory Relief. “It’s not easy to do, and I would posit they can’t do it without enhanced small business involvement.”

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