Deregulating big business in the name of small business

This week, House Republicans will take up legislation to “help” small businesses by deregulating industry in a variety of areas including Wall Street, the environment, food safety, workplace safety and consumer product safety. The public will be told that this legislation, the Small Business Regulatory Flexibility Improvements Act (SBRFIA, HR 527), is one of the only ways to help small businesses recover and get our economy growing again. Claims of regulation hurting, and never helping, small businesses will dominate floor speeches and press releases. All of this will serve to mask the true aim of the legislation: to let the titans of industry game the system. If it passes, the big winners will be big business (as they often are in our current Congress); the losers will be real small businesses.

The SBRFIA is a small business bill in name only. It would delay or block regulations targeted exclusively at giant corporations to allow time to study their effects on small businesses, even when those regulations don’t apply to small businesses. Any rule that has an “indirect effect” or a “revenue effect” on small businesses would be treated exactly the same as a regulation that directly targets them. This may sound reasonable, but there’s a catch. Nowhere does the bill define what is, or more importantly what isn’t, an “indirect effect” or “revenue effect.”

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So how will our government, when regulating big business, be able to prove that a regulation doesn’t have an “indirect effect” or “revenue effect” on small businesses? Don’t look to this legislation for answers. More likely, we’ll be looking to big business lobbyists if this bill passes. The measure lets corporate lobbyists drag the government into court to kill regulations if they can dream up some “indirect effect” or “revenue effect” that the government didn’t consider. It’s not hard to imagine most new standards and safeguards getting trapped in legal limbo – which is exactly what big business wants.

That this legislation is drafted to be vague is no accident. Nor is it a coincidence that the bill makes no attempt to assist real small businesses. The SBRFIA is designed to mislead lawmakers and the public into believing they are helping small businesses, while giving large corporations a free pass on rules designed to hold them accountable and protect the public.

As I explained during my 2013 congressional testimony on a previous version of the SBRFIA, it doesn’t have to be this way. The legislation can easily be rewritten to make it apply only to rules aimed at small businesses. Instead, this year’s version of the SBRFIA goes even further in the opposite direction. It would turn regulations that are designed to apply only to a handful of the biggest banks, or the biggest energy companies, into “small business” regulations, and send federal agencies on a wild goose chase looking for small business impacts that simply do not exist – all on the taxpayer’s dime.

Lawmakers should reject this deceptive attempt by corporate interests to misrepresent their motives, evade accountability and game the system.

Narang is the Regulatory Policy advocate for Public Citizen’s Congress Watch Division.

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