Beware This Big Business Trojan Horse

New Legislation Would Let Big Corporations Hide Their Agendas in Small Business Packaging, Attack Federal Agencies and Safeguards From Within

February 3, 2015

Contact:
David Rosen, drosen@citizen.org, (202) 588-7742
Angela Bradbery, abradbery@citizen.org, (202) 588-7741
Brian Gumm, bgumm@foreffectivegov.org, (202) 683-4812

WASHINGTON, D.C. – Lawmakers should refuse a gift to big business masquerading as a small business bill to be voted on Thursday in the U.S. House of Representatives, the Coalition for Sensible Safeguards (CSS) said today.

The coalition opposes the Small Business Regulatory Flexibility Improvements Act (SBRFIA) (H.R. 527) and is calling on members of Congress to reject the bill, which would give corporate interests even greater advantages in the regulatory process than they already enjoy.

Similar to the Regulatory Accountability Act (H.R. 185) that passed in the House on Jan. 13, the SBRFIA would increase unnecessary and lengthy regulatory delays by adding a host of new, untargeted analytical requirements for agency policy actions – including rulemakings and guidance documents. These new requirements would not help small businesses; rather, they would further impede rulemaking and make it nearly impossible for executive agencies to fulfill the missions for which they were created: protecting the public from emerging health, economic and environmental risks.

“Executive agencies charged with protecting the public already face a gauntlet of procedural hurdles when they attempt to modernize rules or standards,” said Katherine McFate, president and CEO of the Center for Effective Government and CSS co-chair. “This bill is designed to increase them. It’s a deliberate attempt to obstruct – not improve – government.”

The legislation says that if a rule has “indirect effects” or “revenue effects” on small businesses, new analyses must be conducted to estimate its costs. These terms are not defined and have no logical boundaries, so in practice, agencies would be under pressure to treat every new rule as impacting small business. New Wall Street reforms that obviously apply only to the biggest banks, or new environmental protections that apply only to giant energy companies, could be delayed or blocked due to their purported small business impacts.

The measure would force these agencies to delay work on rules until new analyses are completed. Under current law, an agency can continue to develop a rule before it has finished an impact analysis if the agency head believes its mission or the law calls for more immediate action. But if the SBRFIA were in place, emergency rules to protect miners, or doctors and nurses threatened by the Ebola virus would be delayed until the agency finished an onerous and highly speculative economic analysis. In the interim, lives could be lost and people needlessly injured.

To make matters worse, the bill would inappropriately increase the authority of the Office of Advocacy in the Small Business Administration (SBA), expanding its role in the regulatory process across multiple agencies and giving it input into decisions far beyond its expertise and mandate. It would give the Chief Counsel of the Office of Advocacy broad new authority to determine which entities count as small businesses. Americans think of the local grocery store or tailor as a small business deserving special consideration in the regulatory process. But the Office uses an elastic definition of a small business that includes major oil refineries and hedge funds. Documents obtained through the Freedom of Information Act show that the Office, independent of the rest of the SBA, often acts as a taxpayer-funded voice for large corporations and the trade associations dominated by them – not genuine small businesses.

“Here are some examples of regulatory help that small businesses really could use from Congress and the federal government: crackdowns on monopolistic business practices, an end to utility and Wall Street manipulation of electricity prices, and prohibition of unfair contract terms imposed by giant corporations on franchisees and small businesses,” said Robert Weissman, president of Public Citizen and CSS co-chair. “This bill has nothing to do with responding to real small business concerns and everything to do with advancing the big business anti-regulation agenda.”

###

The Coalition for Sensible Safeguards fights for regulations that protect American workers and families. We are a national alliance of 150 consumer, labor, scientific, research, good government, faith, community, health, environmental and public interest groups representing millions of Americans. For more information about the coalition, go to SensibleSafeguards.org.