Small-business office confronts critics: 'We do not block rules'

The chief of the federal agency charged with protecting small business from costly regulations squared off Thursday against a critic who alleges it blocks new rules at the bidding of big industry.

The Office of Advocacy, an independent unit housed at the Small Business Administration, has come under fire in recent weeks from pro-regulation watchdog groups who say it has become a mouthpiece for major trade associations.

The dispute flared up Thursday, when both sides made their case during a contentious hearing of the House Small Business Committee’s investigative sub-panel.

Under questioning from lawmakers, Office of Advocacy Chief Counsel Winslow Sargeant defended the obscure unit’s work. Last year alone, he said, the office saved small business start-ups $2.4 million in regulatory costs.

He bristled at assertion that the office has become a pawn of the U.S. Chamber of Commerce, the National Association of Manufacturers, The American Chemistry Council and other groups that are fighting against a wide array of proposed federal rules.

“We do not block rules, or make rules less effective,” Sargeant said, maintaining that the office’s efforts in recent years were in the defense of the little guy.

“Small businesses are disproportionately impacted by regulations,” he said. “We know that.”

Sargeant said he has convened 84 roundtable meetings attended by small-business interests and other groups with stakes in rules being promulgated at federal agencies. Input from those groups, along with the office’s independent research, led Sargeant to sign off on more than 90 formal comments submitted to federal agencies in hopes of affecting the final language of new regulations.

Two public interest groups issued reports earlier this year suggesting that the roundtable meetings routinely included lobbyists and representatives from major trade groups.

Citing obtained email correspondence and other records, the Center for Progressive Reform and the Center for Effective Government say the final comments submitted by the Office of Advocacy often mirror the wishes of the trade groups.

Rena Steinzor, a University of Maryland law professor who serves as president of the Center for Progressive Reform, said the Office of Advocacy has consciously diverted its attention to the industry groups, often to the detriment of small business.

“Large business uses small business as a kind of human shield,” Steinzor testified. “The last thing these businesses need is a taxpayer subsidy.”

Sergeant countered that members of the trade groups in question include small-business owners, and said the meetings are held in inclusive fashion.

But Steinzor said the office’s roundtables, which are closed to the public and press, violate the Federal Advisory Committee Act and urged members of the panel to call upon the Government Accountability Office to launch an investigation.

Lawmakers on the committee appeared cool to the request.

The panel’s top Democrat, Rep. Yvette Clarke (D-N.Y.), said a GAO probe might be premature, and that further oversight from the committee was the best course of action.

“I don’t know if I found this to be collusion,” she said following the hearing.

However, Clarke did raise concerns about the damage budget cuts might do to the Office of Advocacy, which has a staff of about 40.

Under questioning Sergeant said the government-wide “sequester” cuts enacted this month would mean slashing $460,000 from the office independent research budget. 

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