Steinzor Testifies this Morning on Benefits of Regulation, Role of SBA's Office of Advocacy

by Matthew Freeman

This morning, CPR President Rena Steinzor testifies before the House Committee on Small Business's Subcommittee on Investigations, Oversight and Regulations. From the witness list, it would appear that this'll be another in a series of hearings structured by House Republicans to inveigh against the regulations that protect Americans from a variety of hazards in the air we breathe, water we drink, places we work, products we buy, food we eat, and more.

If history is any guide, most of the testimony and discussion will focus not on how best to protect Americans from such problems, but on the costs to small business of doing so. Steinzor is the lone witness permitted to the minority party -- the Democrats, that is -- and as such, could well be the only person who mentions the benefits of regulation. Study after study has demonstrated that the economic benefits of regulation vastly exceed the economic costs. Indeed, before a significant regulation can be finalized, the regulatory agencies must conduct an extensive cost-benefit analysis to be certain that the benefits of the rule exceed the costs. That process is not without flaws: Typically it is slanted to overstate the costs and understate the benefits, and it focuses on economic benefits, ignoring those that cannot be readily expressed in dollar terms. But it's the process this and previous administrations have relied upon. For years, opponents of regulation took the line that we needed to be sure benefits, so measured, outweigh costs. They got what they wanted, but can't take "yes" for an answer, so now they simply rail against costs, and ignore the benefits.

Steinzor will remind them of what those safeguards bring us in terms of lives saved, workdays not lost, health care dollars not spent, ecosystems preserved, and more.

She'll do one other thing, as well. The lead witness this morning will be Winslow Sargeant, who runs the Small Business Administration's Office of Advocacy. CPR's Sidney Shapiro and James Goodwin recently published a white paper examining the Office's role in the regulatory process (Distorting the Interests of Small Business: How the Small Business Administration Office of Advocacy’s Politicization of Small Business Concerns Undermines Public Health and Safety). The report documents the ways that the Office of Advocacy has focused simply on opposing needed regulatory safeguards for health, safety and the environment, rather than on finding ways to make sure that small businesses can comply with such standards or on finding ways to tailor regulations to the needs of small business. They conclude that the Office of Advocacy is increasingly a taxpayer-funded anti-regulatory lobbying outfit that works hand-in-glove with big business and its special interest lobbyists.

That shortchanges small businesses across the nation -- businesses that do indeed have needs that differ from those of large businesses -- and it's a poor use of precious taxpayer dollars.  Accordingly, Steinzor will urge the committee to move for an investigation of the Office of Advocacy by the Government Accountability Office (GAO).  Steinzor summarizes her remarks for the subcommittee thusly:

  • Small business deserves assistance regarding compliance with regulatory requirements, and the SBA Office of Advocacy ought to provide this assistance rather than operating as an institutionalized opponent of regulations targeted by its big business cronies.
  • Two recent reports by CPR and the Center for Effective Government reveal that the Office of Advocacy systematically ignores the needs of small business and instead operates, largely in secret, as a loyal foot soldier in the big business campaign against regulation.
  • Regulation is vital to the quality of life we take for granted in America, saving lives, preserving health, and safeguarding the natural environment for our children.
  • If anything, our regulatory system is dangerously weak, and Congress should focus on reviving it rather than eroding public protections.

She may be a lone voice at the witness table, but she'll be a strong one.



© 2016 The Center for Progressive Reform