CPR Report: Small Business Administration's Office of Advocacy Dances to Big Business's Tune

Congress created the Office of Advocacy (Office) of the Small Business Administration (SBA) to represent the interests of small business before regulatory agencies. It recognized that, unlike larger firms, many, if not most, small businesses can't afford to lobby regulators and file rulemaking comments because of the expense involved. The Office was supposed to fill this gap by ensuring that agencies account for the unique concerns of small businesses when developing new regulations. Instead, as new reports from the Center for Progressive Reform and the Center for Effective Government document, the Office of Advocacy is using its resources and influence to weaken the regulatory process, usually at the behest of big business. The Office of Advocacy has steadily expanded its role in the rulemaking process, creating numerous opportunities to oppose regulation, slow the regulatory process, and dilute the protection of people and the environment against unreasonable risks. Its activities are frequently undertaken in conjunction with corporate lobbies and trade associations that represent the interests of their large business members. Often, it is difficult to find even a sliver of sunlight between the positions taken by the Office and those taken by such prominent regulatory opponents as the big-business-focused U.S. Chamber of Commerce. It turns out that's not by accident: The Center for Effective Government's report exposes emails between the Office and big business interests demonstrating that the Office takes its lead from big business lobbyists. The Office of Advocacy bolsters its anti-regulatory efforts by sponsoring research projects with the obvious aim of weakening the U.S. regulatory system. Non-governmental researchers carry out these projects under contracts awarded by the Office with little in the way of oversight or peer review. At least in some cases, these "research" papers are thinly veiled political documents. The most egregious example is the 2010 study by economists Nicole Crain and Mark Crain, which purported to find that the annual cost of federal regulations in 2008 was about $1.75 trillion. As CPR and others demonstrated, the Office ignored serious methodological problems with the report, which rendered it implausible, apparently because the results fit with the Office's anti-regulatory narrative.