Reviewing The Sba's Office Of Advocacy Report On The Regulatory Flexibility Act
Summary
The printed record of a June 22, 2023 hearing of the House Committee on Small Business reviewing the SBA Office of Advocacy's report on the Regulatory Flexibility Act, published as Small Business Committee Document Number 118-019. Rep. Blaine Luetkemeyer presided and in his opening statement noted that the Chief Counsel of Advocacy position had sat vacant since 2017. Ranking Member Nydia Velazquez said she hoped to discuss Advocacy's RFA work in fiscal year 2022. The sole witness, Major L. Clark, Deputy Chief Counsel for Advocacy, testified that in fiscal year 2022 the office submitted a record 37 comment letters, hosted a record 30 roundtables and trained 257 officials at 10 agencies. He also addressed H.R. 399, the Small Business Advocacy Improvements Act.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
REVIEWING THE SBA'S OFFICE OF ADVOCACY
REPORT ON THE REGULATORY FLEXIBILITY ACT
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
JUNE 22, 2023
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 118-019
Available via the GPO Website: www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
52-558 WASHINGTON : 2024
HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
BLAINE LUETKEMEYER, Missouri
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
MARIA SALAZAR, Florida
TRACEY MANN, Kansas
JAKE ELLZEY, Texas
MARC MOLINARO, New York
MARK ALFORD, Missouri
ELI CRANE, Arizona
AARON BEAN, Florida
WESLEY HUNT, Texas
NICK LALOTA, New York
NYDIA VELAZQUEZ, New York, Ranking Member
JARED GOLDEN, Maine
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
GREG LANDSMAN, Ohio
MORGAN MCGARVEY, Kentucky
MARIE GLUESENKAMP PEREZ, Washington
HILLARY SCHOLTEN, Michigan
SHRI THANEDAR, Michigan
JUDY CHU, California
SHARICE DAVIDS, Kansas
CHRIS PAPPAS, New Hampshire
Ben Johnson, Majority Staff Director
Melissa Jung, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Hon. Blaine Luetkemeyer.......................................... 1
Hon. Nydia Velazquez............................................. 2
WITNESS
Mr. Major L. Clark, Deputy Chief Counsel for Advocacy, United
States Small Business Administration-Office of Advocacy,
Washington, DC................................................. 4
APPENDIX
Prepared Statement:
Mr. Major L. Clark, Deputy Chief Counsel for Advocacy, United
States Small Business Administration-Office of Advocacy,
Washington, DC............................................. 25
Questions and Answers for the Record:
Questions from Hon. Williams and Answers from Mr. Clark...... 59
Additional Material for the Record:
NFIB......................................................... 63
U.S. Chamber of Commerce..................................... 66
REVIEWING THE SBA'S OFFICE OF ADVOCACY
REPORT ON THE REGULATORY FLEXIBILITY ACT
----------
THURSDAY, JUNE 22, 2023
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:02 a.m., in Room
2360, Rayburn House Office Building, Hon. Blaine Luetkemeyer
[vice chairman of the Committee] presiding.
Present: Representatives Williams, Luetkemeyer, Stauber,
Meuser, Van Duyne, Salazar, Mann, Ellzey, Molinaro, Alford,
Crane, Bean, Hunt, LaLota, Velazquez, Golden, Mfume, McGarvey,
Scholten, Thanedar, Chu, Davids, and Pappas.
Mr. LUETKEMEYER. [Presiding] Okay. We will begin the
hearing with our prayer and pledge. Today, the prayer is led by
Mr. Crane from Arizona.
Mr. CRANE. All right. Dear Heavenly Father, thank you so
much for giving us the opportunity to be here in the nation's
capital. We ask that you continue to bless this nation. Guide
us, direct us, give us wisdom. And we also ask for prosperity
to continue to flow to the citizens of this country. In your
son's name, Amen.
Mr. LUETKEMEYER. With that we will stand for the pledge.
Welcome to everyone this morning. Chairman Williams is out
and in his vernacular the ace of the pitching staff is on leave
today and we have reached the bullpen to get the relief pitcher
coming in. So that is where I am at this morning. Glad to be
with everybody. Glad we are able to do this.
So I now call the Committee on Small Business to order. And
without objection the Chair is authorized to declare a recess
of the Committee at any time.
I now recognize myself for my opening statement.
Welcome to today's hearing which will focus on reviewing
the Small Business Administration's Office of Advocacy Report
on the Regulatory Flexibility Act. First, I want to thank our
witness, Mr. Major L. Clark, who serves as the deputy chief
counsel for Advocacy at the SBA. Hope this is the first of
several productive hearings we will have with you this
Congress, and I appreciate you speaking with us today, sir.
This hearing could not be coming at a more important time.
The Office of Advocacy is intended to be a crucial tool,
serving as a watch dog and advocating for small businesses
within the federal rulemaking process. This Committee has drawn
great attention to our concerns with the federal government
regarding the Regulatory Flexibility Act.
The Biden Administration's actions with rulemaking have
proven the need to strengthen the RFA in order to be an
effective check for small businesses. We have seen the
insufficiencies through numerous examples of federal agencies
failing to consider the impact of their rulemaking on small
businesses.
Although the Office of Advocacy is doing more work with the
RFA than it has in the last 10 years, excessive regulations are
continuing to hurt small businesses. It is clear we must
conduct this necessary oversight to ensure the Biden
administration is properly amending the laws designed to
safeguard small businesses and the regulatory process, not
create a further burden.
Creating this change starts with the Office of Advocacy.
Over the years, your office has faced several challenges in its
duty to advocate for small businesses. While you are recognized
as being independent of the SBA, it is clear there is often
association that makes it difficult for your office to have a
final say throughout the regulatory development process.
Another concern previously addressed by this Committee is
the Office's Chief Counsel of Advocacy position sitting vacant
since 2017. We have sent letters to President Biden calling for
him to fill this position. It is clear to this Committee that
President Biden does not see this position as a priority.
Perhaps this administration would like to leave this position
vacant so they can continue with their reckless rulemaking
agenda.
To date, the federal government has done a shameful job of
meeting their responsibility to consider the impact that
proposed regulations will have on small businesses. The
Democrat standard of ramming through crushing regulations,
reckless spending, and driving up costs on small businesses
must stop. Burdensome regulations and government red tape
create a headache for all Americans but they are especially
harmful for main street.
Today, examining a report on the Regulatory Flexibility Act
is an important step to continuing exposing the federal
government's failures and abuses to provide protections for
main street. As a Member of the House Committee on Small
Business, we will continue to fight for these crucial revisions
in the RFA and rulemaking process to support Main Street
America and President Biden clearly is not.
With that, Mr. Clark, thank you again for joining us today.
We look forward to the conversation ahead.
Before I yield I would ask for unanimous consent to enter
into the record a statement from the NFIB. And without
objection, so ordered.
I now recognize our Ranking Member from New York, Ms.
Velazquez, for her opening remarks.
Ms. VELAZQUEZ. Thank you, Mr. Chairman. Mr. Clark, welcome
back to the committee.
I want to take a moment to thank you for your service. I
know that you have been the Acting Chief Counsel of Advocacy
for more than 6 years and your dedication is commendable. The
position of chief counsel is an important role.
The Office of Advocacy serves as the independent voice of
small businesses within the federal government. It is their job
to promote the concerns of small firms before all three
branches of the federal government and state policymakers. A
central component of that role is to monitor and report on
agencies' compliance with the Regulatory Flexibility Act, or
RFA.
Today, I hope to have a productive discussion on Advocacy's
RFA work in fiscal year 2022.
As you know, 99.9 percent of all U.S. businesses are
considered small. Some of these small firms can have 1,500
employees and up to $47 million in receipts, depending on the
industry.
While they may be considered small in their sector, many of
the larger firms have lawyers, accountants, and other experts
who understand the rules, submit comments on rules to the
agency, and help the business comply with regulations.
It is important to make this distinction during our
discussion today and take the time to learn more about how the
Office of Advocacy conducts outreach to ensure the views of the
smallest of the small businesses are being conveyed to the
agencies, and in turn, level the playing field for small
businesses.
We must also discuss comment letters Advocacy files with
federal agencies, which are not violation letters, but efforts
to alert agencies to their rules' impact on small businesses.
In many areas these letters are effective, leading to a
number of modifications to the rules that have benefitted small
businesses and still achieved the mission of the regulations.
Contrary to what we will hear today, federal regulations
can and do benefit our economy, like regulations that protect
our air and waters, boosting small businesses that comprise the
outdoor recreational industry, which accounted for $454 billion
of our GDP in 2021.
The key is not to roll back all regulations that protect
our health, safety, and environment but to allow Advocacy to
work with agencies to recognize the impact regulations have on
small businesses, and work to find ways to balance the shared
goal of minimizing the burdens and achieving the goal of the
regulation.
Smart, well-crafted, common-sense regulations have the
potential to unleash innovation and provide critical health,
safety, and environmental protections.
With that, thank you again for testifying today, and I look
forward to hearing more about the regulatory work you have
performed and how we can strengthen the Office of Advocacy and
ensure that small businesses have a voice at all levels of
government.
Thank you, Mr. Chairman, I yield back.
Mr. LUETKEMEYER. The gentlelady yields back.
With that we will now introduce our witness, Mr. Major L.
Clark. Mr. Clark is the deputy chief counsel for Advocacy for
the Small Business Administration's Office of Advocacy.
Currently, he leads the office and is responsible for the day-
to-day operations. Prior to his time at the SBA, Mr. Clark was
a senior corporate officer for the Maxima Corporation managing
several multimillion dollar federal contracts. Earlier in his
career in public service, Mr. Clark worked on this very
committee as the chief administrative officer. Mr. Clark earned
his Juris Doctorate and Masters of Urban Planning from the
University of Iowa and a Bachelor of Science in Political
Science from North Carolina Agricultural and Technical
University. He also served as a professor in the Graduate Urban
Planning program at Morgan State University.
Mr. Clark, thank you for being here today. We look forward
to the conversation ahead.
Before recognizing the witness I would like to remind him
that his oral testimony is restricted to 5 minutes. If you see
the red light come on in front of you, sir, that indicates that
it is time to wrap up your testimony and your questioning. I
would ask you to make these microphones pull forward. The whole
box can be pulled forward. Make sure that you speak into it
clearly not only for the benefit for us but I know we are
taking notes. The stenographer is here and they need to be able
to hear your words distinctly.
So with that, you are recognized for 5 minutes, Mr. Clark.
STATEMENT OF MAJOR L. CLARK, DEPUTY CHIEF COUNSEL FOR ADVOCACY,
U.S. SMALL BUSINESS ADMINISTRATION-OFFICE OF ADVOCACY
Mr. CLARK. Good morning, Chairman Luetkemeyer, and Ranking
Member Velazquez, and Members of the Committee. I am honored to
be here today on behalf of the Office of Advocacy to present
testimony to you on federal agency compliance with the
Regulatory Flexibility Act.
Advocacy is an independent office that is required by
statute to speak on behalf of the small business community
before federal agencies, Congress, and the White House. This
testimony does not reflect the views of the administration and
has not been circulated to the Office of Management and Budget
for clearance. In fact, none of our products are cleared by the
administration because of our independence.
As deputy chief counsel, and on behalf of the entire
Advocacy family, I would like to thank the Committee for your
continued support over the years. Congress recognized the
importance of small businesses to our nation's economy. As
such, Advocacy was created in 1976 to be an independent voice
for small businesses within the federal government,
particularly during the federal regulatory process.
Our legal team works to ensure agencies' regulations do not
unduly burden small businesses. Our Economic Research team
conducts important research on small businesses and their role
in the economy. And our regional advocates provide outreach to
small business stakeholders across the country.
I will also note that 4 years after the passage of the RFA,
and I must have been 10 years old, I was the staff director of
this Committee, so I understand firsthand the work that goes
into important legislation such as this and how important small
businesses are to the economy and to Congress.
The Regulatory Flexibility Act requires federal agencies to
consider the impact of their regulatory proposals on small
entities, analyze effective alternatives that minimize small
entity impacts, and make their analysis available for public
comment. As the watchdog for small businesses, Congress charged
Advocacy with ensuring agency compliance with this law. The
specific requirements of the RFA are discussed in my written
testimony.
Advocacy reports to Congress every year on agency
compliance with the RFA. Our report for fiscal year 2022 was
submitted to this Committee last month. Advocacy continued to
remain active during fiscal year 2022 on behalf of our nation's
small businesses. In fact, our output increased compared to
previous years. We submitted a record 37 comment letters to
federal agencies and hosted a record 30 roundtables on
regulatory concerns facing small businesses.
We also provided training to 257 officials at 10 agencies.
We conducted four SBREFA panels with the CFPB and the EPA. We
also achieved numerous victories for small businesses because
of working with agencies on RFA compliance. These numbers were
due in large part to new methods of communication and outreach
Advocacy has adopted since the COVID-19 pandemic to reach more
small businesses, including holding virtual meetings and
roundtables.
Regarding agency compliance with the RFA, in recent years
the most frequent concerns Advocacy has cited in public comment
letters to agencies were deficiencies in the RFA analysis.
These include but are not limited to inadequate analysis of
small entity impacts, and lack of consideration of significant
alternatives. Advocacy has also increasingly argued that
agencies need to conduct more outreach to small entities during
the rulemaking process.
Mr. Chairman, Advocacy is aware of H.R. 399, the Small
Business Advocacy Improvements Act, which recently passed the
House of Representatives. This bill would amend Advocacy's
charter to clarify our authority to research and represent
small interests on international issues. Because Advocacy
already does these activities, this is a commonsense change to
our charter.
Mr. Chairman, this concludes my oral testimony and I
request that Advocacy's RFA report 2022 be included in the
record, in the hearing record.
Mr. LUETKEMEYER. Without objection.
Mr. CLARK. Thank you for the opportunity to testify today
and I am happy to answer any questions that you may have.
Mr. LUETKEMEYER. Thank you, Mr. Clark.
With that we will move to the Member questions under the 5-
minute rule and I will recognize myself for 5 minutes.
The Office of Advocacy's most recent report that we just
entered into the record stated that your office, and you stated
this in your testimony, submitted 37 comment letters, held over
30 roundtables, and trained 257 federal agency staff on the
RFA. This is some of the highest volume work that has come out
of this office in decades. However, much of it seems to have
been in vain if we are looking at the mountains of regulations
that have been placed on small businesses in the past few
years. The American Action Forum estimates there have been over
$318 billion in total costs and 218 million additional
paperwork hours associated with President Biden's regulatory
actions from just his first 2 years in office.
So Mr. Clark, do you feel that your guidance is taken
seriously by the administration, the various agencies? I mean,
I realize that you are writing letters and you are having
roundtables, trying to train people, and yet we wind up with
$318 billion worth of costs in new rules and regulations, and
some of them do not follow up with small business costs.
Can you comment on that?
Mr. CLARK. Thank you, Mr. Chairman, for your question.
Yes, I do think that the Office of Advocacy has its work in
terms of representing small businesses, continues to make
improvements for our small businesses, and specifically, in our
small business economy. I go back in time as I said in my
report to the period of time in which there was not a
Regulatory Flexibility Act, and moving forward there has been
tremendous changes, some changes to the Regulatory Flexibility
Act, improving the process. But the overall thrust of that has
been to give more support to our small businesses as they
continue to be the economic backbone of this country.
Mr. LUETKEMEYER. Well, I guess the question is do you think
the agencies are living up to their requirements to file
reports with regard to the impact on small businesses? And it
does not appear to be that way to me whenever, if you look at
the lack of reports that come out of some of the agencies when
it comes to some of these rulings. There is no report with
regards to the impact on small businesses, and if it is, it is
just sort of lip service. There is no real true analysis there.
Would you agree with that?
Mr. CLARK. Yes. I would agree that in some of the
regulatory actions that the analysis has not been true. And
that has been one of the elements that we have pointed out in
our comment letters to the agencies. But it is also one of the
elements in which we have been working diligent with agencies
to improve their analysis of small businesses.
Mr. LUETKEMEYER. Well, so that begs the question that if
they are not doing the job then how can we get them to do the
job? What kind of enforcement mechanism do we need in place?
And so I just want to throw something out here for you to
consider and we can discuss further. But it seems to me that if
they are not going to follow this, and they have been given the
charge to do their own analysis, if they are not doing it,
maybe we need the CBO or maybe we need your office to do the
analysis of all these rules to find out what the real cost of
them is as well as the impact on small businesses, because they
are not submitting reports now, and the ones they do submit are
not quite frankly worthwhile. So we need to have an independent
third party coming in and doing their work if they are not
going to do it.
Would you agree with that or have you got a better idea? I
have got a minute and a half to discuss this.
Mr. CLARK. Well, I do not know if we need a third party to
come in. I think one of the areas that we have looked at over
the period of time since I have been in Advocacy has been the
shortage or the lack of data that is available on small
businesses. And we have worked very diligently with the Census
office to develop much better data on small business and small
business impact. So I think part of what we see developing over
a period of time has been this lack of data. And we see in
those agencies where data has been much better in terms of
analysis, that the analysis has been much more beneficial to
small businesses.
Mr. LUETKEMEYER. Well, I know as the Ranking Member in the
last term we worked with a number of different groups, whether
it was the Chamber of Commerce, the NFIB, Job Creators Network.
There are a lot of different entities out there that have lots
of information on small businesses and the effect that these
rules have. As I indicated in my question earlier, the American
Action Forum did an estimate of $318 billion on the cost of
these rules. So I think there is probably enough data
available. We just have to find a way to get it accumulated.
With that, my time is expired. Thank you for your testimony
this morning, Mr. Clark.
And with that we recognize the lady from New York, the
Ranking Member, Ms. Velazquez, for 5 minutes.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Mr. Clark, the size standard for some industries allows
small firms to have 1,500 employees, and an average receipt up
to $47 million. Your office advocates on behalf of these larger
companies in the name of small businesses. Can you address this
concern?
Mr. CLARK. Thank you for your question, Ranking Member
Velazquez.
One of the things that we have been pushing agencies to do
in their analysis is to recognize that the regulation one size
does not fit all. And in that regard what we have been working
very diligently trying to get them to do is analyze the impact
of the regulation on different levels of small business. So,
yes, the larger businesses as you said in your opening
statement do have more resources, but we also are very
concerned with that one, two, three, four-man person shop that
are without those resources. And those are the ones that we
want the agencies to work on.
Ms. VELAZQUEZ. I hear you.
Trade associations and law firms which represent both big
and small businesses participate in your events and are sharing
the views of big businesses. What steps do you take to ensure
that the feedback that you are soliciting is truly that of
small businesses and not just those that have the resources to
hire attorneys and consultants?
Mr. CLARK. Our roundtables are open to the public. But as
we engage individuals who are talking, doing those roundtables
and so forth, we engage them to inform us of who they are and
what type of business they have, the size of their business. So
we are very conscious of the fact that because our roundtables
are open to the public others can come in. But we try to
streamline that process when it comes to receiving the
information from those who are testifying or providing
information to us.
Ms. VELAZQUEZ. How do you do that? Do you have the staff?
Mr. CLARK. Our staff, during our roundtables, whatever
lawyer is in charge of that roundtable is asking that question.
So a person presents, we ask that person exactly tell us about
your business.
Ms. VELAZQUEZ. The RFA requires agencies to consider the
regulatory impacts on small entities, but when Advocacy submits
comment letters to agencies, it focuses on the potential costs
of regulations. This is only half of the equation. Why does
Advocacy not report on the benefits of regulation to small
businesses?
Mr. CLARK. In part because our statutory mandate requires
us to focus on cost.
Ms. VELAZQUEZ. I know that. That is what the law says.
Mr. CLARK. Yeah. Yeah.
Ms. VELAZQUEZ. What needs to be done to get a complete
analysis of the impacts on small businesses?
Mr. CLARK. Well, one of the things we do and we recognize,
that small businesses are not monolithic, and that small
businesses have different interests. So in our analysis, in our
discussions on compliance, one of the things we are doing is
trying to bring all viewpoints of small businesses to that
process. And in that regard, there are small businesses that
will share with us that a proposed regulation may very well be
beneficial to them as opposed to overly burdensome in terms of
costs. So we try to put all of that into the discussions that
we have with the agencies regarding that regulation.
Ms. VELAZQUEZ. I think that going forward it is very
important so that everyone could have a whole picture of the
impact or benefits of such regulations.
I am pleased that Advocacy has adopted new ways to reach
more businesses. Have the online roundtables and events led to
more outreach to small businesses that historically have not
attended?
Mr. CLARK. We think so. We think because the technology has
been drastically improved, which allows for virtual
roundtables, we think we are able to reach a much larger
segment of the small business community. We are able to reach
many small businesses who simply can't take time from their
work to attend a very formal process but can, in fact, go
online on their computer or their cell phone and participate.
Ms. VELAZQUEZ. I yield back. Thank you.
Mr. LUETKEMEYER. Time has expired.
With that I recognize Mr. Crane from Arizona for 5 minutes.
Mr. CRANE. Thank you, Mr. Chairman.
First I want to start by saying thank you, Mr. Clark, for
appearing before the Committee today.
Sir, would you say that you believe in environmental
justice?
Mr. CLARK. How would you define environmental justice, sir?
I mean, I do believe in environmental justice across the board.
Yes.
Mr. CRANE. Can you go into that a little and why you
believe in that?
Mr. CLARK. Well, environmental justice for me personally is
a process of keeping in balance the structure that has been
placed before us. You know, that God has placed before us. And
I believe that there needs to be that balance in terms of how
we interact with the environment.
Mr. CRANE. Thank you.
Would you say that your office is an advocate of the
Justice 40 Initiative?
Mr. CLARK. Our office has presented information on the
Justice-40 Initiative in the sense of getting a much more
robust involvement with the broader community, yes.
Mr. CRANE. Do you think the EPA could apply these
regulations inconsistently or in a way that prevents small
businesses from developing?
Mr. CLARK. Our intent in the Office of Advocacy is to
continue to work with EPA so that that does not happen.
Mr. CRANE. Sir, are you aware that the Environmental
Justice Small Grans program has funded projects completely
unrelated to environmental justice?
Mr. CLARK. I am aware of some of those through our
attorneys, yes.
Mr. CRANE. What would you say, sir, is the most effective
thing that your office has done to advocate for small business?
Mr. CLARK. I am sorry, can you repeat your question?
Mr. CRANE. What would you say is the most effective thing
that your office has done to advocate for small business?
Mr. CLARK. Our office has over the years presented itself
to all of the federal agencies as representing small business.
We continue to promote the statutory mandate that we are the
watchdog of small business. And in that regard, we have been I
think very successful in getting agencies to understand the
role that we play and that we are there to represent the
interests of small business.
Mr. CRANE. Okay.
Mr. CLARK. I can give you examples of some of the things we
that we have done.
Mr. CRANE. Yesterday, sir, I had the Arizona Restaurant
Association in my office. We had about a dozen small business
owner-operators in my office. One of the things that they were,
you know, very concerned about is, you know, the raising of
minimum wage. They talked about how it was affecting them. Has
your office done any advocacy whatsoever to push back on these
types of mandatory raises that are crushing small businesses?
Mr. CLARK. Our office has been aggressively involved with
the----
Mr. LUETKEMEYER. Mr. Clark, Mr. Clark, can you pull the
microphone closer to you, please?
Mr. CLARK. Yes, sir. Can you hear me now?
Mr. LUETKEMEYER. Yeah, that is fine. Thank you.
Mr. CLARK. I am sorry. Our office has been aggressively
involved with the Department of Labor on that particular issue
from the outset, and we have had roundtables across the
country. We have submitted comment letters. We have presented
various viewpoints on the impact of the minimum wage on small
businesses. And we have had----
Mr. CRANE. So real quick, sorry to interrupt you, sir, but
you would say that your office has actually pushed back on
making a set minimum wage mandatory for small businesses; is
that what you are saying?
Mr. CLARK. Our office has responded to the proposed
regulations from the Department of Labor carrying forward the
comments from small businesses in terms of the impact of those
regulations on their businesses, yes.
Mr. CRANE. Thank you.
What about this administration's seeming war on gas and oil
as soon as they took office. Have you guys advocated at all
about that and just the crushing impact that that has had on
not only transportation but delivery of all small goods that
these small businesses use?
Mr. LUETKEMEYER. We are out of time. 35:35xxx
Can he answer that really quickly, Mr. Chairman?
Mr. CLARK. Our office--I am sorry. Excuse me.
Mr. LUETKEMEYER. We are out of time.
Mr. CLARK. We will be happy to answer that question in
writing, Mr. Chairman.
Mr. LUETKEMEYER. We are out of time.
With that we go to the gentleman, Mr. McGarvey, from
Kentucky for 5 minutes.
Mr. MCGARVEY. Thank you, Mr. Chairman.
Mr. Clark, thank you for being here today. At least in my
time on this Committee you have the distinction of having one
of the coolest names so I can see why they made you the third.
That is a name you hold on to and pass down.
As you know, the Office of Advocacy was created by Congress
in 1976 to be the independent voice for the small business
community within the federal government. That is a major, major
responsibility and one that we think is very important. Small
businesses are the backbone of our economy and they need to
have a voice, an advocate in the federal government that is
looking out for them.
Part of today's focus is the Regulatory Flexibility Act.
This requires federal agencies to work with the Office of
Advocacy to gather input from small businesses during the
rulemaking process so that our agencies can actually understand
how the rules and regulations we are promulgating will impact
small businesses. We need federal agencies to be able to create
strong rules and regulations, but we need those rules and
regulations to work. We have to make sure that the small
businesses have their voice heard in the rulemaking process and
that the proposed rules do not unduly burden our small
businesses.
So Mr. Clark, what steps has the Office of Advocacy taken
with federal agencies and small businesses to ensure that the
rules and regulations achieve their policy goals without
hurting small businesses?
Mr. CLARK. Thank you for your question.
The Office of Advocacy works with agencies in the
development, as they develop the proposed regulations that they
want to implement. We have over the years been able to work
much more closely with the agency as they develop their
regulation. Agencies have asked us for input really on their
regulations as it impacts small businesses. So we have become
very aggressive but not overbearing in terms of our ability to
work with the drafters of regulations, giving them suggestions
and input in terms of how that proposed regulations will impact
small business.
Mr. MCGARVEY. Thank you. And again, that is important
because sometimes something looks good on paper in the
legislative body. Then all of a sudden it gets out there in the
wild and where the rubber meets the road it does not work as
well. So I appreciate you taking an advocacy stance.
It is important, too, I think when looking at the advocacy
how you balance things. It is a balancing act; right? So how do
you balance the competing interests of wanting to create rules
that are as effective as possible, for instance, strong
environmental regulations, without harming small businesses and
their competitiveness?
Mr. CLARK. Well, part of what we do in that regard is to
try to provide the agency with a balanced analysis of how their
proposed rule may be impacting small business. And that takes
into consideration those small businesses that are supporting
the regulation and those small businesses that are not. So, we
try to give the agency that type of assessment but also giving
them or trying to provide them with data from time to time that
we have on the various small businesses that will be impacted.
And that was the question earlier to Ranking Member Velazquez
was that we recognize that small businesses, one size does not
fit all in terms of small businesses. So we try to give the
agency that viewpoint as they look at the regulatory processes.
Mr. MCGARVEY. Thank you. I think very important. And in my
small remaining time I just want to point out in my state of
Kentucky we make a little product called bourbon. And 95
percent of the country's bourbon is made in my state. One
hundred percent of the good stuff. And a lot of those are made
by small distilleries in the state. Small businesses.
So my colleagues on this Committee knows it takes four
things to make bourbon. You have got to have corn, yeast, a new
charred white oak barrel, and of course, water. So water
regulations are very important for us in the state of Kentucky.
We have been watching the WOTUS rulemaking closely.
How does your office work with the EPA? And have you urged
the EPA to consider small distillers when the agency considers
rules to protect our nation's water?
Mr. CLARK. Well, we have, as you may know, we did comment
on the WOTUS regulation. But more specifically, we have
actually been to your state, the state of Kentucky, 3 years ago
and toured many of the small business distilleries. So we have
firsthand information, firsthand look-see as to how small
businesses are making product and trying to remain economically
viable.
Mr. MCGARVEY. Thank you, Mr. Chairman. I yield back.
Ms. SALAZAR. And now I recognize Mr. Meuser from
Pennsylvania for 5 minutes.
Mr. MEUSER. Thank you, Madam Chairwoman. Appreciate it.
Mr. Clark, thank you very much for being with us. I am
enjoying your testimony.
So picking up on a few subjects that we started with
regarding regulatory flexibility and such and your ability to
have oversight and weigh in. This WOTUS ruling, for instance,
that my colleague brought up.
Now, I am not going to contend that Pennsylvania potatoes
are more important than Kentucky bourbon but we are farmers too
and deal with the WOTUS issue. I mean, 100 percent of them. So
and not in a favorable manner. Now, if they were talked with
and it was inclusionary how it was discussed and how we come up
with the right plan for the environment and for farms and
businesses that would make sense. Is that something that you
take a role in, bringing people together so we get the right
answers?
Mr. CLARK. Yes. Again, our responsibility as statute is to
be the voice for small business. And one of the ways we do that
is to try to bring all small businesses together to give us
their input, their assessment. Because we don't have all of the
answers. We need our small businesses to tell us very
specifically how various proposed regulations may impact them.
And not only how they may impact them but what they consider to
be alternative and viable solutions to the problems.
Mr. MEUSER. You have seen some of the reports, like the
NFIB, for instance. I don't know if you work with them and gain
information from them but, I mean, the attorney general of Iowa
said that 97 percent of the land in Iowa would not be subject
to federal regulation. I mean, that sounds pretty excessive.
And from what I know from on-the-ground information, that is
something that needs to be looked at.
As well as the discussion on energy. I mean, there is a
right way to do things. There is a responsible way. There is an
irresponsible way. I think our regulatory nature in our country
at this point, and I know the Marselles-Shale region, for
instance, where we have natural gas, there are many regulations
that come out that hinder and suppress the ability to grow
natural gas, which by the way is half the carbon emissions of
oil and other fossil fuels. And yet, these regulations just
seem to keep coming. So are fossil fuels in general, I mean,
energy costs, is that something that your agency works on for
the benefit of small business?
Mr. CLARK. Yes. We have three attorneys that are involved
in that area. I will say, however, Congressman, that one of the
things that has to be considered in the discussion of the
regulation is that there are some regulations that do come out
which are beyond the control of Advocacy to deal with and that
is because of the way the statutes have been designed for those
regulations. For example, an interim final regulation is really
beyond our ability even though we have more recently been
involved in trying to work with agencies on interim final
regulations as they impact small businesses.
Mr. MEUSER. Good to hear, sir.
What about Scope 3 with manufacturers and any company that
has to deal with Scope 3? And many, as you know, small
businesses are preparing for Scope 3. It is just on public
companies now but they are getting ready for it.
Mr. CLARK. Yes. We have actually submitted a comment letter
to the SEC as well as to the FAR counsel on this whole Scope 3
issue, as well as, I believe, some Members of Congress have
also submitted letters on the impact of Scope 3 on small
business. So we are aware of that. We are following that. We
are wanting to make sure that our small businesses are not
unduly impacted by this process.
Mr. MEUSER. Good. Well, I look forward to working with you
on that because our focus is to advocate, as well, for small
businesses.
Do you think that some federal agencies overly certify
their proposed regulations as stating that they will not
substantially impact small businesses? Do you battle with some
agencies on occasion, on their over certifying?
Mr. CLARK. Our concern when an agency does, in fact,
attempt to certify a regulation that that certification has a
factual basis. And the factual basis should set forth the
reasons why they feel that the impact is minimum or to no
extent on small business. And when agencies fail to give us
that factual basis we do bring it to their attention.
Mr. MEUSER. Thank you. I have run out of time. Thanks for
your service. Thanks for your work.
I yield back, Madam Chair.
Ms. SALAZAR. Thank you.
And now we recognize Ms. Scholten from the state of
Michigan for 5 minutes.
Ms. SCHOLTEN. Thank you so much. Thank you, Madam Chair,
and thank you, Mr. Clark for being here today.
I am happy that we are focusing on this critically
important issue and the SBA's Office of Advocacy. I think it is
so important that the Committee highlight the oversight work
and the work that your office does to streamline and make small
businesses as efficient as possible. I could not agree more
with what has been said today about how excessive regulation
far too often hamstrings businesses.
Mr. Clark, an important responsibility of your office is to
submit public comment letters to regulatory agencies during the
rulemaking process. Can you walk us through how Advocacy
determines when to comment on a proposed rule? What are
instances where the office has been successful in influencing
agencies through submitting public comment letters?
Mr. CLARK. Thank you. Yes.
The Office of Advocacy, as I said, the regulatory part is
made up of attorneys and we are involved across the board with
the agencies in our specific areas. We work internally with the
agency where possible to deal with the issues that they are
trying to deal with and with the impact of the proposed
regulation on small business. When we reach a point that we
cannot agree on what the changes should be and the agency goes
forward with its proposed regulation, at that point in time we
do write a public comment letter highlighting the concerns that
have been shared with us by small businesses and asking the
agency to take action to modify its regulation as it impacts
small business.
I mean, an example of that if you like is with the
Department of Defense which is part of my area with what is
called the CMMC, the Cybersecurity Maturity Model for
cybersecurity where we work with the agency on what they were
proposing. It was going to have a tremendous impact on our
small businesses in the defense industry. They tried to make
some changes. Did not make sufficient changes. We wrote a
comment letter and I think Members of Congress took action and
that particular regulation was pulled. They are now back with a
modified regulation and hopefully we are examining it.
Hopefully it will be much better than what it was in terms of
the negative impact that it was having on small businesses in
our defense industry.
Ms. SCHOLTEN. And you and your office will continue to
follow through on that presumably to ensure that it is actually
implemented in a more efficient and streamlined----
Mr. CLARK. Yes. Yes. As a result of our involvement with
the particular unit, they have actually reached out to me
wanting input and so forth before they go forward. And that is
one of the things that we tried to develop that relationship
with the agencies so that we can give them firsthand
information, firsthand input in the process.
Ms. SCHOLTEN. Thank you. I think that smart, well-crafted
regulations is what we are all after here. I know that I hear
consistently from small business owners in my district that one
of the most time-consuming things that they have to spend their
time on is trying to discern overly complex regulations. In
West Michigan and across the country, small businesses do not
have access to attorneys, accountant, or other resources that
they can lean on to help make sure that they are in compliance.
Quickly, if you can, how do small businesses become aware
of changes to federal rules? And what does your office do to
make sure that businesses get that information and can work as
much as they can without the resources of an attorney or an
accountant to make sure they are in compliance?
Mr. CLARK. We do several things in that regard. One, we
publish on a weekly, daily basis really, what is called a
regulatory alert. And as the regulations come out, as our
attorneys have looked at the regulations to make some
determinations, they publish on our website this regulatory
alert to alert the small business community of the proposed
regulation. We also, as I mentioned earlier, have regional
advocates. And one of the things that we encourage our regional
advocates to do is to push that proposed regulation to their
stakeholders in the various states that they operate in. But we
also reach out to other trade groups that we know have an
interest in that. So we are trying as much as possible to
spread the knowledge of the proposed regulation----
Ms. SALAZAR. Your time is up.
Mr. CLARK.--trying to get as much impact and input from our
stakeholders. And depending----
Ms. SALAZAR. Thank you. Your time is up. 52:18xxx few more
minutes. So thank you.
Ms. SCHOLTEN. Thank you, Madam.
Ms. SALAZAR. So now I will recognize myself for 5 minutes.
I am Maria Salazar. I represent the City of Miami and I
thank you very much, Mr. Clark, for being here today. We, as a
Committee, we appreciate the work you do as an independent
voice.
I was thinking when I was listening to your words that you
have a very big job. You have a very big job. You are like the
David against the Goliath. And all this overburdening of
regulations coming from the federal government. And when I say
that I come from the City of Miami, I represent 75 percent of
my constituents are first generation Americans. Most of them do
not speak English very well but they love the American system.
And they are escaping countries where the government is all
over them. So they are coming to the United States asking or
yearning to be able to have their small shop, like you said,
two or three employees. We are not talking about 500 employees.
We are talking about three people or four people. But that is
their American dream. And now that I am hearing is that the
feds are not listening to you and they are crushing our people,
our small business community.
So my first question is, sir, how can we help you so we can
help the people that I just described as soon as possible? What
is it that we need to do, one step that we need to do right now
in order to help you do a better job?
Mr. CLARK. Well, one of the things that we have done over
the period of time and as we have held what we call regional
regulatory roundtables, and we have been very successful in
getting our small businesses--one, two people shops, larger
shops to come out.
Ms. SALAZAR. What happens with that info?
Mr. CLARK. Much more information, much more outreach in
that regard where it is not an adversarial situation. It is us
sharing information and helping to educate and helping the
folks understand it is something that we would love to work
with the Committee on in terms of the Members in your various
districts to ensure that----
Ms. SALAZAR. I get it. But you are telling me there is
info. You are doing focus groups like we would say on
television and that you are bringing all that info back to the
mothership. And from what I am hearing, the feds are just not
listening to you. And that is the main problem. You are an
advocate for the small business group.
Mr. CLARK. Yes. But it depends on the situation. When we
were holding, and when we held our regional roundtables across
the country about 2 years ago, we actually had agencies in
attendance at those roundtables. And they heard firsthand from
stakeholders, from small business stakeholders as to the issues
that were impacting them. And they went back to their
agencies----
Ms. SALAZAR. With all due respect, sir, because of my time,
give me just one way or one step that we could take as a
Committee to help you stop this trend in the last 2 years when
the Biden administration has been in power, there are the
figures, $300 billion costing business and 200 million hours of
additional paperwork. That is not the American dream.
Mr. CLARK. Well, one way you can do it, again, as I said
earlier, is to work with us in terms of outreach to our small
businesses because small businesses represent 99 percent of all
businesses in the country and our ability to reach all of them
with the small staff that we have is impossible but----
Ms. SALAZAR. In order to reach them for what reason you
need to reach them? I am talking about reaching the federal
agencies with respect to what you are saying.
Mr. CLARK. Yeah. We need to reach them in order to
understand how the regulations are impacting them.
Ms. SALAZAR. But don't we know that already?
Mr. CLARK. Sometimes----
Ms. SALAZAR. We know that more regulation impacts them more
adversely.
Mr. CLARK. Sometimes we don't. For example, we talked about
the minimum wage. Well, that minimum wage regulation has a
different impact on different types of businesses. And that is
the type of information that we need to be able to present back
to the agency.
Ms. SALAZAR. I have 30 more seconds.
How is your relationship with Administrator Guzman? Your
office is very close to the main office for the SBA. Is that
good? Does that help you do your job better or it does not?
Mr. CLARK. Our job is independent of SBA. That is what we
do. We are independent of SBA even though physically we are
very close to that office.
Ms. SALAZAR. Right.
Mr. CLARK. We carry out our responsibility as the statute
requires us to do.
Ms. SALAZAR. Okay. Thank you, sir. My time is up.
I now recognize Mr. Golden from the state of Maine for 5
minutes.
Mr. GOLDEN. Thank you.
Mr. Clark, the lobster fishery in Maine has a lot of
federal regulations coming at it. I know we have worked with
your office on a few relevant to 57:41xx whales, which by the
way just recently a federal Appeals Court ruled that those
regulations were based on flawed data and could lead to
hundreds of thousands of jobs being lost in Maine. And so that
was good news for the Main lobster fishery.
I wanted to talk a little bit about offshore wind. So BOEM
has published guidance on mitigating the impacts of offshore
wind energy on fisheries, yet the Bureau is not required to do
an RFA analysis. That being said, you filed public policy on
BOEM's guidance and in the comments you said that BOEM must
conduct an RFA analysis in its draft environmental assessments
and environmental impact statements to ensure the agency, as
well as developers, properly consider the impacts offshore wind
development projects on small businesses. Can you talk a little
bit about why you feel strongly that that is very important?
Mr. CLARK. Yes. We have, over the short period of time, had
conversations with small businesses regarding this offshore
situation. And there are businesses that are concerned that
their businesses are going to be adversely harmed by the
process. And there are other businesses that clearly see some
opportunity for benefit from the process. So we think that the
most efficient way for the agency to do this analysis is to do
an RFA analysis to determine what the impacts may be. We have a
lot of businesses that are adjacent to the shore and to the
shoreline and so forth that feel they are going to be adversely
harmed by the development of the offshore wind, while others
feel that it may be an opportunity for them to develop a
business but----
Mr. GOLDEN. Do you know, sir, if BOEM has started to
perform an RFA analysis or have they committed to you to do one
in the future?
Mr. CLARK. They have not yet committed to us but I think we
submitted a letter last week to them requesting that this be
done.
Mr. GOLDEN. Good. Thank you.
In your comment to BOEM you said that small businesses can
be significantly impacted by offshore development projects. Why
is it that BOEM is going forward with leases right now prior to
finalizing the rule on mitigating these impacts?
Mr. CLARK. I cannot address why they are going forward with
it right at this moment.
Mr. GOLDEN. Do you have concerns that they are?
Mr. CLARK. Yes. I mean, again, the concern is that we have
small businesses that are what I would characterize as caught
in the crosswinds of this whole process. And those small
businesses need to better understand exactly what the
parameters are for this process so that they can adjust, if
necessary, their business model and so forth to better
participate. These businesses, many of them, all of them,
really, are the economic backbone of that whole process. So we
need to make sure that they are adequately protected as much as
possible.
Mr. GOLDEN. Does your office pretty much exclusively just
comment on concerns being raised by small businesses or do you
ever propose steps that could be taken by federal agencies to
mitigate their impacts of their regulations?
Mr. CLARK. Our office, we will comment on the proposed
regulation and we will give the agency the assessments that we
have received from our stakeholders as we have held roundtables
and other types of listening sessions. And where appropriate,
we will try to work with the agency in terms of analyzing data
that may be available to give a different or better impact
assessment.
Mr. GOLDEN. Well, I know one thing, that the lobster
fishery, and these are all small businesses as you know, is
seeking in Maine exclusion zones which would ensure that their
fishing grounds are not impacted by offshore wind. I do not
know if you have seen any of those proposals yet but I am sure
you will be hearing more about it in the weeks and months ahead
and it is something we would love to be in a conversation with
your office about.
Mr. CLARK. Yeah. I have not seen a proposal but I am sure
the attorney that is working on those areas is very much
involved in that process.
Ms. SALAZAR. Thank you.
Now I recognize Mr. Stauber from Minnesota, for 5 minutes.
Mr. STAUBER. Thank you, Madam Chair.
On April 27, 2022, Small Business Administrator Guzman
testified in front of this House Small Business Committee that
she was ``not familiar'' with the Small Business Regulatory
Enforcement Fairness Act, also known as SBREFA. I am ever wary
of the regulatory burden imposed upon small businesses. As part
of the Committee's ongoing work to conduct oversight of small
business concerns, it is important that we ensure this gap of
knowledge on the federal regulatory process does not extend
beyond the administrator and that our small businesses are
being duly considered by other federal agencies. However, what
I fear is that it is not a lack of knowledge that is keeping
the concerns of small businesses out of consideration and
federal agency rulemakings but rather an honest contempt held
for main street by this administration. As an example, almost
$300 billion, that is with a B, $300 billion of additional
regulations on our small businesses and farmers by this
administration in just 2-1/2 years.
Now to my question. EPA recently proposed greenhouse gas
regulations that would require existing coal and natural gas
power plants and new natural gas power plants to install carbon
capture or coal fire hydrogen. Many small entity electric
utilities, notably electric cooperatives and public power
utilities, which are prevalent in the district that I
represent, will continue to rely upon coal and natural gas,
including new construction of natural gas units to maintain
reliability and affordability.
Major Clark, has the SBA Office of Advocacy been asked to
weigh in on the estimated impact of EPA's proposed greenhouse
regulations on these small utilities?
Mr. CLARK. I think the attorney that represents that area
has been working with EPA in that area. I do believe that we
actually have been following that. I do not have all of the
specific details. I would be happy to provide those to you. But
we are very much aware of the impact greenhouse gas is having
and will have in terms of those regulations.
Mr. STAUBER. Would you agree that those regulations, the
additional regulations applied would cost the citizens who
consume that energy more money?
Mr. CLARK. Without having the data available in front of me
that is one of the areas that we would have to look at in terms
of what the additional cost, if any, would be in that process.
And that is part of what we do in the Office of Advocacy is to
try to weigh the costs of these proposed regulations.
Mr. STAUBER. Does the Office of Advocacy plan to engage on
this rulemaking particularly during the current open comment
period?
Mr. CLARK. Yes.
Mr. STAUBER. Okay. Would you be able to give this Committee
the results of that when it is completed?
Mr. CLARK. I would be happy to. All of our public comment
letters are filed and I do think we submit our public comment
letters to this Committee but we would be happy to do that.
Mr. STAUBER. Thank you.
Unfortunately, I believe the EPA has come to the inaccurate
conclusion and improperly certified this rulemaking by
determining it would not have a ``significant economic impact
on a substantial number of small entities.'' I have heard from
electric coops and public power utilities that this proposed
rule will, in fact, have a significant impact on their
operations and on the communities they serve. I encourage the
Office of Advocacy to officially weigh in on these proposals.
And I will work with you and my colleagues to hold the agencies
accountable and ensure their compliance with RFA and SBREFA.
And with that I appreciate your time here, Major Clark. And
thank you for your service.
And Madam Chair, I yield back.
Mr. CLARK. And we look forward to working with you on that.
Thank you.
Ms. SALAZAR. Thank you.
And now I recognize Mr. Mfume from Maryland for 5 minutes.
Mr. MFUME. Thank you very much, Madam Chair.
Mr. Clark, good to see you.
Allow me a point of personal privilege, Madam Chair, and to
be a little bit redundant. You heard earlier in Mr. Clark's
introduction by the Chair that he was the staff director to
this Committee back in the 1980s. Chaired, the Committee was,
by my predecessor, whose portrait is on the wall down there,
Congressman Perrin Mitchell of Maryland. And although Mr. Clark
is being a little modest right now, the truth of the matter is
he was one of the most respected Members of any staff on the
Hill in those days, almost, and I do not want you to blush, but
almost legendary. And for those of us who had a chance to know
him and to watch the level and the quality of his work for this
Committee, it just stays with us.
I got on the Committee when I got here in 1987. Mr. Clark
was serving, as I said, for my predecessor. Ronald Reagan was
president. We were all younger men then, including Ronald
Reagan. And I have had an opportunity over the years to kind of
hear about him and hear about him. But it is an opportunity
today for me to see you and to say thank you, again, for all of
your work. We do not want things like that to sort of fade
away, and I say that primarily for the staff that works this
Committee today. It is a good opportunity to do good things and
to go a long, long way.
One of the things, Mr. Clark, I would like to do quickly is
to get our opinion on antitrust regulations and how they are
impacting businesses. We know that the Sherman Antitrust Act,
the Federal Trade Communications Antitrust Act and Clayton
Antitrust Act are the three real pillars that were put in place
legislatively to help protect small businesses from the sort of
antitrust things that we have seen. We all on this Committee
know that small businesses are challenged with a lot of
different things, not the least of which is the lack of access
to capital, the lack of access to credit. That was the case 40
years ago. It is still, unfortunately, the case today. And
those businesses today, like then, need every tool possible I
think to be able to fight back.
Now, one of the biggest threats is market consolidation. So
give lack of access to capital, lack of access to credit,
antitrust needs and protections, market consolidation is
really, in my opinion, something that we have got to make sure
that we do not take our eye off of. And so whether it is
controlling trusts that exist out here, and there are a number
of controlling trusts, monopolies, price fixing, things of that
nature make it very, very difficult. And then over all of that
we have the notion of mergers and acquisitions that consolidate
power in the hands of a few big corporate companies that are
swallowing up market share repeatedly and almost out of
control.
So if you could take a few moments, and we do have a few
moments, for you to sort of give us your thoughts on all of
this and tell us how Advocacy is working with the FTC on
antitrust issues and on the other issues that I have talked
about. That would be very sufficient and I would appreciate
your thoughts.
Mr. CLARK. Thank you for your question.
The merger and acquisition and consolidation of all of
these things impact small businesses in many ways that you
talked about. But one of the most specific impacts is with the
supply chain. Small businesses rely very much on the ability to
get their products from manufacturers, from wholesalers, and
others and put them into the supply chain. And when we have
these mergers and acquisitions, many times those supply chains
are directly impacted and the relationships that many small
businesses may have with those supply chains are directly
impacted.
If I may share with you an example. When I was out in the
private sector we were involved in IT service and there were a
couple of mergers and acquisitions that directly impacted our
ability to get product that we were getting before to our
customers. Some at point in time were the federal government.
So when we look at this whole issue, one of the things that we
have to be concerned with is what does this actually do to the
99 percent small businesses that we have in the United States.
And the more they are squeezed in terms of their ability to
provide product to the consumer, provide product to their
customers, the worse off the economy is in terms of that whole
process.
Mr. MEUSER. And speaking of being a squeeze, do you have
any idea conceptually of to what extent the percentage of small
businesses are being squeezed and ultimately put out of
business because of these larger controlling interests that
take over as a result of an acquisition or merger?
Mr. CLARK. I do not have firsthand data at my fingertips on
that. That is something that we would be happy to look at to
see what the impact is as it relates to small business. But it
is the mergers. It is the cost of money that many of these
small businesses have to incur. And the increase in cost of
money that occurs as a result of the acquisitions and mergers.
So we will be happy to look at that and get back to the
Committee on that.
Mr. MEUSER. And if you could provide that. And if I may ask
unanimous, Madam Chair, just for 10 other seconds, if you could
also, as a subgrouping or title of that, let us know what that
effect is on minority business enterprise also that would be
good.
Mr. CLARK. Yes, I will.
Mr. MEUSER. Thank you.
Ms. SALAZAR. Now I recognize Mr. Landsman from Ohio for 5
minutes.
Mr. LANDSMAN. Thank you, Madam Chair. Mr. Clark, thank you
for being here. I appreciate all the work that you have done.
Incredible career. I am sure you have done this so many times
that this is easy but I suspect that testifying in front of a
Congressional Committee is not always the most fun, so we do
appreciate you coming today and being part of this
conversation.
My questions are really around what outreach looks like.
For context, I think we oftentimes offer incredible services or
we have really important information where we trip up. And this
is government, business, elected officials. We get tripped up
on the outreach piece. I think we are struggling, even with
social media, to figure out exactly how best to reach people.
And so I am really curious about how you approach that
generally.
But in particular, and this is my second question is around
childcare. I am a huge, huge believer in the role that
childcare plays in our economy. They are almost all small
businesses. Most of the time, at least in my city, these are
black-owned businesses and they get left out of the
conversation in terms of small businesses even though they are
a small business providing incredible support to small
businesses. So I am curious about the outreach to childcare
providers.
And then you all do economic reports, and I may be
describing that wrong, but economic research report. And I am
wondering if you have one or would be willing to do one on
childcare as we try to learn more about how to best engage them
generally as it relates to rulemaking, how these rules affect
them but bigger picture, just how we engage them so that they
are part of that small business ecosystem.
Mr. CLARK. Congressman, thank you for your question. And
yes, we would be happy to look at the possibility of doing an
economic report, research report on child care. I do not know
what the data field looks like that is out there but we would
look at the data field and try to put together this type of
report.
But we have over the period of time been involved with
childcare facilities and working with childcare companies in
terms of the excellent job that they do in terms of protecting
our children, working and caring for our children while we are
out trying to make a living for the family.
Three years ago when we were in Atlanta for a regional
roundtable we attended or participated and we had a childcare
facility participate in two roundtables that we had during that
period of time showing us exactly what they do, how they do it,
and sharing with us some of the issues that they were
experiencing in child care. So we are aware of some of those
issues. We will continue to look at the issue of childcare
research report and see exactly what's there that we can
provide that makes good sense in terms of an economic research
report.
Mr. LANDSMAN. Thank you. And again, I appreciate your
service. Everything you do. Being here today.
Madam Chair, I yield back.
Ms. SALAZAR. Thank you.
Now we recognize Mr. Thanedar from Michigan for 5 minutes.
Mr. THANEDAR. Thank you, Madam Chair. And Mr. Clark, thank
you for all your good service.
As a small business owner and entrepreneur, I personally
wrote a grant for small business innovation research. I know
you worked with SBIR in the past. And I won an award that
helped me with my small business.
I do recognize, you know, the small businesses in my
district, I represent Detroit and the downriver communities and
the small businesses are struggling with inflation, trying to
acquire enough customer base, keep the revenues up so they can
keep the payroll and hopefully have a little bit of money left
over for their own personal use or investing in their small
businesses.
I want smart regulation. I want regulations that help in
safety and help in health and safety issues. I want regulations
that help protect workers and protect workers' rights. So there
is good rulemaking and there is bad rulemaking. Sometimes the
rules are so complex that the little shops, mom and pop shops
do not have the time to go through all this maze of
requirements and the time commitment that they have to put.
My question to you is how can we ensure that there is less
paperwork, less work on the part of the business owner to deal
with this? How do we communicate these changes in rules? People
are so busy running their small businesses and do not have the
time to find out all about it. How do we train them? How do we
communicate with them? How do we help them to deal with these
changes? And how does that affect also many of the Black and
Brown business owners in my district?
Mr. CLARK. Well, again, one of the things that we attempt
to do is to do outreach. And in doing outreach, what we are
trying to do is to, and what we do, we are not just trying, but
what we do is to try to convey to the small businesses what the
proposed regulation is designed to do. And in that regard what
we then seek from that small business is some input as to how
that will impact them. So if we look at, for example, things
like the amount of time that it takes to perform a particular
task that the regulation is calling for. And if the agency has
underestimated that time and the small business tells us, well,
it takes 2 hours longer than what the agency has proposed, then
we share that with that agency and we put a cost factor to that
particular situation. So what we attempt to do, again, is to
bring that information to the agency because, again, a
regulation, the agency will sometimes look at a regulation as
one size fitting all. But regulations have a different impact
on the different size of businesses and therefore, we are very
concerned with that one, two, three, four-person shop where
that regulation of compliance may cost a larger business only
$5 to comply but that small business has to pay $100 just to be
in compliance. So those are some of the things that we look at
in terms of the cost of regulation and what's necessary for
compliance.
Mr. THANEDAR. You know, thank you so much for that.
Recently, I have been starting AI, the artificial
intelligence technology and I have seen some really interesting
applications of that. Can such technology or similar technology
can be used to make it easier, quicker for small businesses to
be able to respond to these regulations?
Mr. CLARK. Well, I, too, have looked at AI, and I think the
answer probably to your question is yes. But I think we have to
be very, very careful with AI, as we have to be careful with
any technology because the misapplication of that technology
can have a worse impact on that small business than what we are
looking at. So we have to look at the aspects of that and what
is really required and so forth and that is something that we
are just doing now.
Mr. THANEDAR. I yield back, Madam Chair.
Ms. SALAZAR. Thank you.
And now I recognize Ms. Chu from California for 5 minutes.
Ms. CHU. Thank you.
Mr. Clark, I want to commend you and the SBA Office of
Advocacy for your important work ensuring federal agencies hear
and consider the needs of small businesses when developing
federal regulations.
However, we know that the smallest and most underserved
businesses such as sole proprietors, minority, or women-owned
businesses and firms in low-income areas are often hard to
reach and less likely to have the resources to advocate for
themselves the way larger businesses do. That is why I am so
glad to hear that Advocacy is continuing post-pandemic to do
your roundtables online which you note has led to greater
participation by businesses than in the past would have gone
unnoticed or would have been unable to travel to D.C. to
participate.
So I would like to hear more about specifically what your
office is doing to ensure that you are finding and hearing the
voices of the most underserved businesses. When Advocacy plans
these virtual roundtables and engages in other forms of
outreach to small businesses, how are you ensuring that the
smallest and most underserved small businesses are being
reached like what I said--sole proprietors, minority- or women-
owned businesses, firms in low income areas, or limited
English-proficient businesses?
Mr. CLARK. Thank you very much.
One of the things we do, we utilize very extensively our
regional advocates that are assigned to each region and to the
various states that they operate within. But in addition to the
regional advocates, we actually attempt to go to the local
community and try to engage the local leadership in our attempt
to reach out to the businesses within their jurisdiction. So we
clearly are aware that different groups have different levels
of activity and different interests, so we try to reach out to
those local organizations that are there to ensure that they
can get their membership to participate in the hearings, in the
roundtables, and so forth.
Ms. CHU. How about on the limited proficient English front?
Mr. CLARK. I'm sorry?
Ms. CHU. Limited English proficient, like those who are
monolingual in other languages?
Mr. CLARK. We utilize multiple languages to reach out to
the various communities that we are trying to reach out to. And
we are not specific to any one specific language. We recognize
that there are multiple groups out here with different
languages and so forth. We have gone to Alaska reaching out to
the different groups there and other places.
Ms. CHU. Okay. Mr. Clark, I understand that only a few
federal agencies are required to conduct Small Business
Regulatory Enforcement Fairness Act panels (SBREFA) which
convene agency officials, the SBA Office of Advocacy and Small
Businesses together to discuss the impact of a proposed
rulemaking on small businesses and to make recommendations. Can
you discuss the process by which small businesses are
identified for participation in these SBREFA panels?
Specifically, are there mechanisms that you use to ensure the
participation of underserved firms like what I have talked
about--sole proprietors, minority- and women-owned, those in
low-income areas, limited English-proficient businesses?
Mr. CLARK. Yes. Each of the agencies that are required to
do a SBREFA panel has a different type of process of reaching
out to the various communities. But one of the things that we
are required to do with the agency and with OIRA is to ensure
that the representation on the panels is adequate
representation. And we will provide the agency in many of those
situations with names of potential small businesses to
participate on those panels.
Ms. CHU. Do you track the participation of those that are
in these underrepresented categories?
Mr. CLARK. We track in terms of the types of issues that
the agency is looking at in terms of those categories. Yes. We
try to get a balanced participation of individuals from the
small business community on the panels.
Ms. CHU. Thank you. I yield back.
Ms. SALAZAR. Mr. Clark, thank you for your presence here
today and we, as the Committee, we appreciate the work that you
do as an independent voice and advocate for small businesses
across the country. You have an impressive resume as other
Members have explained that highlight a long career both in the
public sector and the private sector working with small
businesses and the issues that affect them. So again, thank you
for your time and for your service to the country.
So I would like to thank once again the witness.
And without objection, Members have 5 legislative days to
submit additional materials and written questions for the
witness to the Chair which will be forwarded to the witness. I
will ask the witness to please respond promptly.
If there is no further business, without objection the
Committee is adjourned. Thanks again.
Mr. CLARK. Thank you.
[Whereupon, at 11:27 a.m., the committee was adjourned.]
A P P E N D I X
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[all]
File and source
- File
- CHRG-118hhrg52558.txt
- Size
- 77,023 bytes
- SHA-256
- 6ef94af22ae4ea0218f3c7394381dace865e835426ebae38d618a003514f906b
- Our copy
- CHRG-118hhrg52558.txt
- Original
- No public link identified.