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Small Businesses are the Lifeblood of the American Free Enterprise System

Entrepreneurship is the pathway that many choose, leading to 66 percent of new jobs being created by small businesses. That’s why the federal government and so many others believe it is important for them to succeed.

We agree. We appreciate the loans, technical assistance, and help navigating new rules and standards that are key components of the Small Business Administration’s mission.

But this study by the Center for Effective Government raises important concerns about the role the Small Business Administration’s Office of Advocacy is playing in the federal rulemaking process. The report confirms my organization’s belief that the Office of Advocacy has seriously strayed from its mission of representing the interests of small businesses before federal agencies.

Recently, the Office of Advocacy asked the U.S. Environmental Protection Agency to withdraw a rule (Waters of the U.S.) that will help EPA and the Army Corps of Engineers better protect our nation’s waterways from pollution. My organization, the American Sustainable Business Council, commissioned an independent poll of over 550 small businesses with fewer than 100 employees and found that 80 percent of them supported the rule. Moreover, 62 percent agree that government regulation is needed to prevent water pollution, and 61 percent believe that government safeguards for water are good for businesses and local communities. I would note that 43 percent of the small business owners in our sample were Republicans, 28 percent were Democrats, and 19 percent were Independents—which is representative of small businesses nationally.

The same was true of the recommendations that the Office of Advocacy has been making on chemicals issues. Counter to Advocacy’s perspective, polling found that three-quarters of small businesses support stricter regulation of chemicals used in everyday products.

Our organization’s experience echoes a key finding of this report: the Office of Advocacy promotes the views of polluting industries, certain large corporations, and the trade association lobbyists they finance rather than defending the interests of genuine small businesses. Gaming the Rules makes a convincing argument that Advocacy’s bias toward the positions of large corporations—which often have interests that diverge from those of their small business counterparts—occurs throughout the entire small business review process.

Contrary to the claims of conservative pundits and policymakers, the majority of small businesses don’t want to roll back health and safety and environmental regulations. They are business owners who care about their communities and don’t believe you have to choose between a strong economy and protecting our health and environment. Small business owners accept that regulations are a necessary part of a modern economy. They provide a level floor for business behavior and can encourage innovation as businesses strive to develop new technologies to meet health standards and energy-saving requirements, which in turn provide social and economic benefits. Consumers are demanding safer and healthier products, too. For business, this means doing everything we can to secure consumers’ confidence in the marketplace, including providing transparent and clear regulations.

Small business leaders are ready, willing, and able to give agencies the input they need to ensure that strong national standards and safeguards take the interests of small businesses into account. Agencies need to reach out to them and ensure that they get input from actual small businesses.

And if Congress and the president really want small businesses involved in rulemaking, they need to scrutinize the activities of the Office of Advocacy much more closely. We do believe that small businesses should be an integral part of the dialogue and decision making. When done correctly, business and government can work together to build our economy while advancing our shared economic, social, and environmental priorities.

As the leading representative of small and medium businesses that want a robust and sustainable economy, together with our member organizations that represent more than 200,000 companies, we want a regulatory process that keeps American businesses on the cutting edge of best practice, protects the environment, and fosters healthy families and communities.

David Levine is the President and Chief Executive Officer of the American Sustainable Business Council.

Note: This was originally published as the forward to Gaming the Rules, a report by the Center for Effective Government.