Reviewing the SBA's Office of Advocacy Report on the Regulatory Flexibility Act (House Small Business Committee hearing, June 22, 2023)

Summary

The printed record of a House Committee on Small Business hearing, Small Business Committee Document Number 118–019, titled Reviewing the SBA's Office of Advocacy Report on the Regulatory Flexibility Act, held June 22, 2023 in the 118th Congress. The committee met at 10:02 a.m. in Room 2360 of the Rayburn House Office Building with Hon. Blaine Luetkemeyer presiding in place of the chairman, and adjourned at 11:27 a.m. The single witness is Major L. Clark, Deputy Chief Counsel for Advocacy at the SBA Office of Advocacy. The appendix lists his prepared statement, questions from Hon. Williams with his answers, and additional material from the NFIB and the U.S. Chamber of Commerce.

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“Reviewing the SBA's Office of Advocacy Report on the Regulatory Flexibility Act (House Small Business Committee hearing, June 22, 2023).” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/reviewing-the-sba-s-office-of-advocacy-report-on-the-regulatory-flexib-06a04cfb01/, SHA-256 abf4256cb48f2cde09fbe73967f24fec8fa80dd9fe61647e2cb23a9fa91e5b6e.

Full text

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

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 VELÁZQUEZ, 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

(II)
CONTENTS
OPENING STATEMENTS
Hon. Blaine Luetkemeyer ....................................................................................... 1
Hon. Nydia Velázquez ............................................................................................. 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

(III)
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, Velázquez, Golden, Mfume, McGarvey,
Scholten, Thanedar, Chu, Davids, and Pappas.
Mr. LUETKEMEYER. [Presiding] Okay. We will begin the hear-
ing 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 cap-
ital. 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 every-
body. 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 Advo-
cacy at the SBA. Hope this is the first of several productive hear-
ings 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
(1)
2

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 nu-
merous 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 con-
tinuing 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 advo-
cate for small businesses. While you are recognized as being inde-
pendent of the SBA, it is clear there is often association that makes
it difficult for your office to have a final say throughout the regu-
latory 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 meet-
ing their responsibility to consider the impact that proposed regula-
tions 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 regu-
lations and government red tape create a headache for all Ameri-
cans 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 con-
tinue to fight for these crucial revisions in the RFA and rulemaking
process to support Main Street America and President Biden clear-
ly 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.
Velázquez, for her opening remarks.
Ms. VELÁZQUEZ. Thank you, Mr. Chairman. Mr. Clark, wel-
come 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.
3

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 Reg-
ulatory 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 un-
derstand 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 Ad-
vocacy 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 agen-
cies 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 rec-
reational 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 agen-
cies 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 envi-
ronmental protections.
With that, thank you again for testifying today, and I look for-
ward to hearing more about the regulatory work you have per-
formed and how we can strengthen the Office of Advocacy and en-
sure 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 fed-
eral 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 Plan-
4

ning from the University of Iowa and a Bachelor of Science in Po-
litical Science from North Carolina Agricultural and Technical Uni-
versity. He also served as a professor in the Graduate Urban Plan-
ning 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 Rank-
ing Member Velázquez, and Members of the Committee. I am hon-
ored 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 reg-
ulatory process.
Our legal team works to ensure agencies’ regulations do not un-
duly burden small businesses. Our Economic Research team con-
ducts 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 Com-
mittee, 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 con-
sider 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
5

ensuring agency compliance with this law. The specific require-
ments 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 con-
ducted four SBREFA panels with the CFPB and the EPA. We also
achieved numerous victories for small businesses because of work-
ing with agencies on RFA compliance. These numbers were due in
large part to new methods of communication and outreach Advo-
cacy 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 let-
ters to agencies were deficiencies in the RFA analysis. These in-
clude but are not limited to inadequate analysis of small entity im-
pacts, and lack of consideration of significant alternatives. Advo-
cacy 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 Busi-
ness 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 activi-
ties, 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 dec-
ades. 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 Presi-
dent 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
6

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 mov-
ing forward there has been tremendous changes, some changes to
the Regulatory Flexibility Act, improving the process. But the over-
all thrust of that has been to give more support to our small busi-
nesses as they continue to be the economic backbone of this coun-
try.
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 bet-
ter 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.
7

Mr. LUETKEMEYER. Well, I know as the Ranking Member in
the last term we worked with a number of different groups, wheth-
er it was the Chamber of Commerce, the NFIB, Job Creators Net-
work. 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 Rank-
ing Member, Ms. Velázquez, for 5 minutes.
Ms. VELÁZQUEZ. 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
Velázquez.
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 dili-
gently trying to get them to do is analyze the impact of the regula-
tion on different levels of small business. So, yes, the larger busi-
nesses as you said in your opening statement do have more re-
sources, 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. VELÁZQUEZ. 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 tes-
tifying or providing information to us.
Ms. VELÁZQUEZ. 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. VELÁZQUEZ. 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 reg-
ulations. This is only half of the equation. Why does Advocacy not
report on the benefits of regulation to small businesses?
8

Mr. CLARK. In part because our statutory mandate requires us
to focus on cost.
Ms. VELÁZQUEZ. I know that. That is what the law says.
Mr. CLARK. Yeah. Yeah.
Ms. VELÁZQUEZ. What needs to be done to get a complete anal-
ysis 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 regula-
tion.
Ms. VELÁZQUEZ. I think that going forward it is very important
so that everyone could have a whole picture of the impact or bene-
fits 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. VELÁZQUEZ. 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 appear-
ing 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 involve-
ment 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 de-
veloping?
9

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 suc-
cessful 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 Asso-
ciation 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 in-
volved 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 view-
points 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 regula-
tions 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 trans-
portation but delivery of all small goods that these small busi-
nesses use?
10

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 writ-
ing, 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 responsi-
bility 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 re-
quires federal agencies to work with the Office of Advocacy to gath-
er input from small businesses during the rulemaking process so
that our agencies can actually understand how the rules and regu-
lations 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 rule-
making 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 busi-
nesses?
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 imple-
ment. 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, giv-
ing them suggestions and input in terms of how that proposed reg-
ulations will impact small business.
Mr. MCGARVEY. Thank you. And again, that is important be-
cause 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 bal-
ance the competing interests of wanting to create rules that are as
effective as possible, for instance, strong environmental regula-
tions, without harming small businesses and their competitiveness?
11

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 pro-
posed rule may be impacting small business. And that takes into
consideration those small businesses that are supporting the regu-
lation 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 Velázquez was that we recog-
nize 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 Ken-
tucky 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 infor-
mation, 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 Pennsyl-
vania 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
12

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 informa-
tion 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 regu-
lation. 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 busi-
nesses 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 busi-
nesses.
Do you think that some federal agencies overly certify their pro-
posed 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
13

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 effi-
cient as possible. I could not agree more with what has been said
today about how excessive regulation far too often hamstrings busi-
nesses.
Mr. Clark, an important responsibility of your office is to submit
public comment letters to regulatory agencies during the rule-
making process. Can you walk us through how Advocacy deter-
mines 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 regula-
tion, 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 regu-
lation 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 indus-
try. They tried to make some changes. Did not make sufficient
changes. We wrote a comment letter and I think Members of Con-
gress took action and that particular regulation was pulled. They
are now back with a modified regulation and hopefully we are ex-
amining it. Hopefully it will be much better than what it was in
terms of the negative impact that it was having on small busi-
nesses 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 imple-
mented 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
14

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 con-
sistently 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 at-
torneys, 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 pub-
lish 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 pub-
lish on our website this regulatory alert to alert the small business
community of the proposed regulation. We also, as I mentioned ear-
lier, have regional advocates. And one of the things that we encour-
age our regional advocates to do is to push that proposed regula-
tion 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 Com-
mittee, 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 com-
ing 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 com-
ing 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 talk-
ing about 500 employees. We are talking about three people or four
people. But that is their American dream. And now that I am hear-
ing 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
15

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 regu-
latory 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 shar-
ing information and helping to educate and helping the folks un-
derstand it is something that we would love to work with the Com-
mittee on in terms of the Members in your various districts to en-
sure 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 impact-
ing 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 ad-
ministration 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 be-
cause 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 under-
stand 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 dif-
ferent impact on different types of businesses. And that is the type
of information that we need to be able to present back to the agen-
cy.
Ms. SALAZAR. I have 30 more seconds.
How is your relationship with Administrator Guzman? Your of-
fice 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?
16

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 re-
quires 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 min-
utes.
Mr. GOLDEN. Thank you.
Mr. Clark, the lobster fishery in Maine has a lot of federal regu-
lations 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 fish-
ery.
I wanted to talk a little bit about offshore wind. So BOEM has
published guidance on mitigating the impacts of offshore wind en-
ergy on fisheries, yet the Bureau is not required to do an RFA
analysis. That being said, you filed public policy on BOEM’s guid-
ance and in the comments you said that BOEM must conduct an
RFA analysis in its draft environmental assessments and environ-
mental impact statements to ensure the agency, as well as devel-
opers, 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 situa-
tion. And there are businesses that are concerned that their busi-
nesses 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 ad-
jacent to the shore and to the shoreline and so forth that feel they
are going to be adversely harmed by the development of the off-
shore 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 final-
izing 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
17

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 proc-
ess. So we need to make sure that they are adequately protected
as much as possible.
Mr. GOLDEN. Does your office pretty much exclusively just com-
ment 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 regula-
tion and we will give the agency the assessments that we have re-
ceived 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 testi-
fied 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 regu-
latory burden imposed upon small businesses. As part of the Com-
mittee’s ongoing work to conduct oversight of small business con-
cerns, it is important that we ensure this gap of knowledge on the
federal regulatory process does not extend beyond the adminis-
trator 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 hon-
est contempt held for main street by this administration. As an ex-
ample, almost $300 billion, that is with a B, $300 billion of addi-
tional regulations on our small businesses and farmers by this ad-
ministration in just 2-1/2 years.
Now to my question. EPA recently proposed greenhouse gas reg-
ulations 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
18

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 ad-
ditional 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 pe-
riod?
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 let-
ters 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 con-
clusion 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
19

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 presi-
dent. 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 pri-
marily 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 acquisi-
tions that consolidate power in the hands of a few big corporate
companies that are swallowing up market share repeatedly and al-
most out of control.
So if you could take a few moments, and we do have a few mo-
ments, 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.
20

If I may share with you an example. When I was out in the pri-
vate 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 busi-
nesses are being squeezed and ultimately put out of business be-
cause 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 busi-
nesses 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 govern-
ment, 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 busi-
nesses 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
21

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 ex-
cellent job that they do in terms of protecting our children, working
and caring for our children while we are out trying to make a liv-
ing for the family.
Three years ago when we were in Atlanta for a regional round-
table 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 serv-
ice. 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 per-
sonal 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 rule-
making 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 com-
mitment that they have to put.
My question to you is how can we ensure that there is less pa-
perwork, 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 commu-
nicate with them? How do we help them to deal with these
22

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 regu-
lation 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 con-
cerned with that one, two, three, four-person shop where that regu-
lation 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 tech-
nology 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 an-
swer 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 tech-
nology 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 re-
quired 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 Advo-
cacy for your important work ensuring federal agencies hear and
consider the needs of small businesses when developing federal reg-
ulations.
However, we know that the smallest and most underserved busi-
nesses such as sole proprietors, minority, or women-owned busi-
nesses 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 Advo-
cacy 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.
23

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 vir-
tual roundtables and engages in other forms of outreach to small
businesses, how are you ensuring that the smallest and most un-
derserved small businesses are being reached like what I said—sole
proprietors, minority- or women-owned businesses, firms in low in-
come 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 ad-
vocates, 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 inter-
ests, 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 En-
forcement Fairness Act panels (SBREFA) which convene agency of-
ficials, 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 re-
quired 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.
24

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 Mem-
bers 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 sub-
mit 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.]
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