Wolf in Sheep's Clothing: Bill Promotes Big Industry Interests in the Guise of Helping Small Business

Under the cynical guise of helping small businesses, on Jan. 27, the House Judiciary Committee will mark up, and the House will soon likely pass, the Small Business Regulatory Flexibility Improvements Act of 2015 (SBRFIA, H.R. 527). Introduced by Small Business Committee Chairman Steve Chabot (R-OH), the real intent of this legislation is to add procedural hurdles to delay public safeguards, expand big industries’ influence in the rulemaking process, and encourage lawsuits that challenge federal agency efforts to protect the American people. 

The legislation would require agencies to assess the potential direct and indirect impacts of agency actions on small businesses. Because the bill broadly defines "indirect costs," it could be applied to virtually any agency rulemaking action.

The bill would also require all agencies to undertake a little-known and substantially flawed review panel process for rules that may have a "significant impact on a substantial number of small businesses." Currently, only three agencies have to convene these panels: the U.S. Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), and the Consumer Financial Protection Bureau (CFPB).

The bill would expand the role of the Small Business Administration's Office of Advocacy, which has a major role in the review process and has a history of amplifying the perspectives of big businesses and trade associations. A November 2014 Center for Effective Government report, Gaming the Rules: How Big Business Hijacks the Small Business Review Process to Weaken Public Protections, found that this review process has been captured by trade associations and their large corporate members, has issued recommendations that are not limited to small business concerns, is duplicative and wasteful of agency resources, and in some cases has resulted in weakened health and safety standards.

Our findings were consistent with other investigations of how the Office of Advocacy operates. Following up on findings from our January 2013 report documenting inappropriate efforts by the Office of Advocacy to influence agency scientific assessments on behalf of big industry, a July 2014 Government Accountability Office report found that the Office of Advocacy could not document the source of their comments to agencies on small business concerns with proposed rules.

As the Center for Effective Government stated in written testimony to the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law on a similar 2013 version of this bill, "The Regulatory Flexibility Improvements Act would undermine the implementation of health and safety rules mandated by current law; it would expand the authority and reach of an agency whose practices and independent judgment are already under scrutiny; and it would unnecessarily divert public resources needed elsewhere. This bill is unwise and unsound and should be rejected."

If anything, our concerns are now even greater with this blatant attempt to use small businesses as cover for corporate efforts to undermine public protections.

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great article, well written chad edward hatten