SBA Management Review: Office of Advocacy (House Small Business subcommittee hearing, April 6, 2022)

Summary

The printed record of a hearing, SBA Management Review: Office of Advocacy, held April 6, 2022 by the Subcommittee on Underserved, Agricultural, and Rural Business Development of the House Committee on Small Business, Small Business Committee Document Number 117–052. The subcommittee met at 10:02 a.m. in Room 2360 of the Rayburn House Office Building with Chairman Jared Golden presiding; Golden and Claudia Tenney gave opening statements. The sole witness was Major Clark, Deputy Chief Counsel for Advocacy, performing the functions of the Chief Counsel, from the SBA Office of Advocacy. The appendix carries his prepared statement, his answers to questions from Tenney, a letter from the American Sustainable Business Network, a Credit Union National Association submission and the Report on the Regulatory Flexibility Act for FY2021. The subcommittee adjourned at 11:01 a.m.

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“SBA Management Review: Office of Advocacy (House Small Business subcommittee hearing, April 6, 2022).” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/sba-management-review-office-of-advocacy-house-small-business-subcommi-1c4bfd4828/, SHA-256 51ac8d1d9a1e027428c25a12cb5569fc0ac5993b65add71badd81a0c20be39f5.

Full text

SBA MANAGEMENT REVIEW: OFFICE OF
ADVOCACY

HEARING
BEFORE THE

SUBCOMMITTEE ON UNDERSERVED,
AGRICULTURAL,
AND RURAL BUSINESS DEVELOPMENT
OF THE

COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION

HEARING HELD
APRIL 6, 2022

Small Business Committee Document Number 117–052
Available via the GPO Website: www.govinfo.gov

U.S. GOVERNMENT PUBLISHING OFFICE
47–194 WASHINGTON : 2022
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELÁZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
TROY CARTER, Louisiana
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin

MELISSA JUNG, Majority Staff Director
ELLEN HARRINGTON, Majority Deputy Staff Director
DAVID PLANNING, Staff Director

(II)
CONTENTS
OPENING STATEMENTS
Page
Hon. Jared Golden ................................................................................................... 1
Hon. Claudia Tenney ............................................................................................... 2

WITNESS
Mr. Major Clark, Deputy Chief Counsel for Advocacy, (Performing the non-
exclusive functions and duties of the Chief Counsel for Advocacy), Office
of Advocacy, United States Small Business Administration, Washington,
DC .......................................................................................................................... 4

APPENDIX
Prepared Statement:
Mr. Major Clark, Deputy Chief Counsel for Advocacy, (Performing the
non-exclusive functions and duties of the Chief Counsel for Advocacy),
Office of Advocacy, United States Small Business Administration,
Washington, DC ............................................................................................ 17
Questions and Answers for the Record:
Questions from Hon. Tenney and Responses from Mr. Major Clark ........... 42
Additional Material for the Record:
American Sustainable Business Network Letter ........................................... 49
Credit Union National Association (CUNA) ................................................... 52
Report on the Regulatory Flexibility Act, FY2021 ......................................... 53

(III)
SBA MANAGEMENT REVIEW: OFFICE OF
ADVOCACY

WEDNESDAY, APRIL 6, 2021

HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
SUBCOMMITTEE ON UNDERSERVED, AGRICULTURAL,
AND RURAL BUSINESS DEVELOPMENT,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:02 a.m., in Room
2360, Rayburn House Office Building, Hon. Jared Golden [chair-
man of the Subcommittee] presiding.
Present: Representatives Golden, Carter, Delgado, Williams,
Stauber, and Tenney.
Chairman GOLDEN. Good morning. I am calling this hearing to
order.
Without objection, the Chair is authorized to declare a recess at
any time.
I would like to begin by noting a few requirements for this hear-
ing. Standing House and Committee rules continue to apply during
hybrid proceedings. All Members are reminded that they are ex-
pected to adhere to these rules, including the rules of decorum.
House regulations require Members to be visible through a video
connection throughout the proceeding, so keep your cameras on.
Also, remember to remain muted until recognized to minimize
background noise.
In the event a Member encounters technical issues that prevent
them from being recognized for questioning, I will move to the next
available Member of the same party and recognize that Member at
the next appropriate time slot provided they have returned to the
proceeding.
I would like to start off today by recognizing Congresswoman
Tenney, who is here today for her first hearing as Ranking Member
of this Subcommittee.
Like me, Rep. Tenney represents a primarily rural district, so I
look forward to working with her to help rural and other under-
served small businesses. Today, the Committee will examine the
management and operations of the Small Business Administra-
tion’s Office of Advocacy. The Office of Advocacy serves as the 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.
This is an important mission. Small businesses are the backbone
of the American economy, so they need a seat at the table when
policy is being crafted. One of the core pillars of the Office of
(1)
2

Advocacy’s mission is to study the role of small businesses in the
economy and the issues impacting entrepreneurs. Recent research
initiatives include creating small business profiles for all 50 states,
collecting data on small business recovery from the pandemic, and
producing reports on the availability of capital for entrepreneurs.
Information like this is helpful for policymakers. In-depth analysis
on the issues impacting small businesses can be hard to come by.
Moreover, Advocacy’s economic research drives more informed pol-
icy that accounts for the interests of small businesses. However, it
is difficult for this research to keep up with the constantly evolving
small business community. I am interested in ways Advocacy can
provide more real time data to better inform our policy decisions.
Another vital function of the Office is representing small busi-
nesses when it comes to regulatory matters. For more than 40
years, Advocacy has enforced the Regulatory Flexibility Act (RFA)
and other laws to ensure small businesses are heard throughout
the regulatory process.
In FY2021, Advocacy provided 17 official public comment letters
to 10 federal agencies on various proposed rules. It also hosted 20
virtual roundtable discussions on proposed rules and regulatory
issues. During that year, Advocacy’s interventions resulted in regu-
latory cost savings for small businesses.
By advocating for the interests of small businesses during the
rulemaking process, the office helps level the playing field for small
firms, who do not always have attorneys, accountants, and compli-
ance officers to determine the impact of regulations on their enter-
prise. The office works with agencies to ensure that rules are
smart, well crafted, and do not impose an undue burden on small
firms.
One important and timely example of the Office’s work on behalf
of small businesses in the regulatory process is the effort of Region
1 advocate, Louis Luchini, to raise concerns with a regulation re-
lated to Maine’s lobster fishery, which is a priority I share. I hope
to find ways to collaborate with the Office on this and other topics
in the future.
So today, I look forward to hearing from Mr. Clark about how we
can strengthen the Office of Advocacy and ensure that small busi-
nesses have a voice at all levels of government and that we, as leg-
islators, have the information that can help us to craft better pol-
icy.
I would now like to yield to the Ranking Member, Ms. Tenney,
for her opening statement.
Ms. TENNEY. Thank you, Mr. Chairman. And I am also a small
business owner. Our business is celebrating its 76th year in rural
upstate New York. And this morning as we hold this hearing, small
businesses are facing record high inflation, labor shortages, and a
supply chain disruption which we are seeing everywhere. At the
same time, the Biden administration continues reckless spending
here in Washington, proposes tax increases on main street, and
burdens small businesses with an ever-growing number of needless
regulations. If there was ever a time for small businesses to have
an advocate in Washington, it is now.
The Office of Advocacy is responsible for representing the con-
cerns of small businesses. The Office is also a source of government
3

statistics. It produces research for policymakers and stakeholders
and provides comments on behalf of small businesses in the regu-
latory process. The Office of Advocacy has consistently shown that
small businesses bear a heavier burden from regulations than large
businesses. As a New Yorker, I can tell you that is the case in New
York as well. And I hear this from my businesses back in upstate
New York in my small, rural, sort of suburban district. They tell
me the lack of staff to comply with copious amounts of paperwork
and onerous technical requirements is evident.
We also know that small businesses operate on thin margins.
Time and money spent working to comply with burdensome regula-
tions is time and money taken away from their business operations
and revenue. Compliance costs are really, really hitting small busi-
nesses hard.
The previous administration cut unnecessary and overly burden-
some regulations. This allowed our entrepeneurs and innovators to
do what they do best: create jobs, grow the economy, and serve our
communities. Unfortunately, the opposite has become the case with
the Biden administration. The American Action Forum reports,
‘‘The Biden administration capped off its first full year in office
with more than $201 billion in regulatory costs and $131 million
hours in new annual paperwork.’’ My office held a digital focus
group with 40 local businesses and found 35 percent of small busi-
nesses in my district cannot expand. Imagine that. Cannot expand
due to government regulations. The Regulatory Flexibility Act
(RFA) requires federal agencies to assess the impact of their pro-
posed final rules on small businesses. The Office of Advocacy, spe-
cifically the chief counsel for Advocacy, is charged with monitoring
compliance with the RFA and ensuring small businesses are rep-
resented in the rule-making process.
I must stress the importance of a chief counsel for Advocacy,
something the Committee Republicans called on President Biden to
do over a year ago. The chief counsel for Advocacy is the govern-
ment’s top watchdog. Allowing this office to remain vacant sends
the wrong message to American small businesses during such a dif-
ficult time. It is crucial that we fill the vital role soon to ensure
small businesses are empowered to grow and prosper. When Wash-
ington rushes to solve problems without listening to small employ-
ers, they end up creating even more problems for our small busi-
nesses. As a small business owner, myself, I know the stress of try-
ing to meet the bottom line, not to mention trying to meet weekly
payroll. I understand the sleepless nights worrying about how to
provide for your employees and service our customers. Small busi-
nesses’ success is vital to our nation’s economic success.
Mr. Clark, I want to thank you for your time today and for your
advocacy on behalf of the small business community. I look forward
to learning more about your work to represent the small businesses
and ways we can support the Office of Advocacy in making sure
their voices are heard. And we all look forward today to your testi-
mony.
I yield back, Mr. Chairman.
Chairman GOLDEN. Thank you very much.
With that, I am going to introduce our witness, Mr. Major Clark
III, the deputy chief counsel for the Office of Advocacy performing
4

the nonexclusive functions and duties of the chief counsel position.
Mr. Clark formerly served as the acting chief counsel from 2017 to
November 2021. And as a chief of staff and senior administrative
officer for this Committee under former Chairman Parren Mitchell.
In addition, Mr. Clark has vast experience working as the assistant
chief counsel for procurement policy at the Office of Advocacy and
in the private sector as the executive vice president of corporate de-
velopment and administration at the Maxima Corporation.
Welcome back, Mr. Clark, and you are now recognized for 5 min-
utes.
STATEMENT OF MAJOR CLARK, DEPUTY CHIEF COUNSEL FOR
ADVOCACY, OFFICE OF ADVOCACY, UNITED STATES SMALL
BUSINESS ADMINISTRATION
Mr. CLARK. Thank you very much, Chairman Golden. And good
morning, Chairman Golden, and Ranking Member Tenney, and
Members of the Subcommittee. I am honored to be here today on
behalf of the Office of Advocacy. I do apologize for not being able
to appear in person, but I am recovering from a recent surgery. So,
I thank the Committee for the flexibility of allowing me to do this
from home.
I, too, want to join Chairman Golden in recognizing Member
Tenney as the new Ranking Member on her recent appointment,
and congratulations on that.
Advocacy is an independent office that speaks on behalf of the
small business community before federal agencies, Congress, and
the White House. The testimony that I am presenting today does
not reflect the views of the administration and has not been cir-
culated to the Office of Management and Budget for clearance. In
fact, none of our products are cleared by the administration be-
cause of our independence.
As deputy chief counsel, and on behalf of the entire Advocacy
family, I would like to thank the Subcommittee for the tremendous
support you have shown over the years to the work that we do.
Now, Congress, as Chairman Golden recognized, recognized the
importance of small business to our nation’s economy. The Office
of Advocacy was created in 1976 to be an independent voice for
small businesses within the federal regulatory process. And I will
note, if I may, that 4 years after the passage of this statute, I be-
came the senior staff Member for this Committee. So, I know first-
hand the importance of legislation, and I know firsthand the impor-
tance of the commitment of this Committee to our small business
community.
At the outset, let me state clearly, because of our independence,
Advocacy is not directly involved in any of SBA’s programs. Inde-
pendently, Advocacy represents small business interests in many
ways. Our economic research team conducts important research on
the needs of small businesses and their role in the economy. Our
legal team works to ensure agencies do not enact regulations that
unduly burden small businesses, and our regional advocates pro-
vide direct contact with small business stakeholders as indicated
earlier by Chairman Golden with Louie and Region 1.
The Regulatory Flexibility Act requires federal agencies to con-
sider the impact of their regulatory proposals on small entities,
5

analyze effective alternatives, and 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 require-
ments of the RFA are discussed in more detail in my written testi-
mony.
Advocacy reports to this Committee and to Congress every year
when the agency complies with the RFA. And I am pleased to an-
nounce that the report for fiscal year 2021 was published last week
and sent to this Committee as required by law.
Now, in recent years, the most frequent concerns Advocacy has
cited in its public comment letters to agencies were deficiencies in
the RFA analysis. This includes but is not limited to inadequate
analysis on small entity impacts and lack of consideration of sig-
nificant alternatives.
For a moment, let me just move to our legislative priorities. Ad-
vocacy currently as stated does not have a Senate-confirmed chief
counsel. Thus, our legislative priorities have not been fully updated
since 2016. Those priorities are discussed in more detail in my
written testimony. However, Advocacy is also aware of H.R. 6454,
the Small Business Advocacy Improvements Act, which recently
passed this Committee. This bill would amend Advocacy’s charter
to clarify our authority to research and represent small business
interests on international issues. Because we already do this under
the Trade Facilitation and Trade Enforcement Act, we support the
change to our charter and support, thus, this bill.
Mr. Chairman, this concludes my oral testimony and I request
that Advocacy’s RFA report, which I mentioned earlier, as well as
my written report, be included in the hearing record.
Chairman GOLDEN. Thank you, Mr. Clark. And we appreciate
your testimony.
I will now begin the question part of the hearing by recognizing
myself for 5 minutes.
The first thing I want to talk about today is something I men-
tioned in my opening statement and I think that you will be famil-
iar with, sir. So, as I referenced up in Region 1, Advocate Louis
Luchini worked with your office on behalf of small business owners
in Maine who are all lobstermen. And you ultimately approved and
put out a March 3rd letter to the Department of Commerce. In that
letter you talked about how the May 1st deadline for lobstermen
to buy new gear, despite that gear not yet being widely available
in the marketplace, was going to put fishermen in ‘‘an impossible
scenario’’ that could lead to delays in their ability to comply but
that it would also lead to their losing a significant amount of rev-
enue, or in some instances could put them out of business and un-
able to fish. As of today, the department has not granted an exten-
sion of the looming May 1st deadline.
Do you continue to believe, sir, that the department is lacking in
flexibility here with this deadline and an unwillingness to push it
back given the reality of the availability of gear that would be nec-
essary to comply?
Mr. CLARK. Mr. Chairman, thank you for the question. And yes,
we continue to believe in what we submitted to Commerce in terms
of our comment letter and the fact that the extension has not been
6

granted leaves us to continue to support our request that such be
granted. I think the request by the lobstermen is not an unrealistic
request. They are not saying that they do not want to comply; they
are just simply saying that because of the requirements to get the
equipment, because of shortages in the supply marketplace, the
chain right now, because of other factors, they are going to be ham-
pered by trying to comply with this regulation. And if that is the
case, then they begin to lose revenue and that becomes a trickling
effect to not only the consumer, lobster lovers like myself, but to
the other businesses that are associated with the lobster industry.
So, I think the request to delay it is very reasonable.
Chairman GOLDEN. Thank you. Well, we very much appreciate
the letter. We feel like the deadline really does need to be moved.
Of course, myself, and most, well, all of the Maine delegation op-
posed the regulations to begin with. In fact, I have never seen a
better example of unjustified regulations, just completely unsup-
ported by data. In my entire life, really. I have told lobstermen in
Maine it is the kind of thing that will just make you lose complete
faith in government and paying attention and using real data and
facts to move forward with something like this. So, I am opposed
across the board but I know that is not your position but I certainly
appreciate the advocacy on behalf of small business owners in re-
gard to this May 1st deadline on having to comply and seeking
flexibility.
Mr. CLARK. And I thank you, sir. I thank you, sir, for the sup-
port from your office on this. That is very well received by my staff
to know that there is support beyond what we have put out there.
So, thank you very much.
Chairman GOLDEN. I wanted to ask, SBAR panels that you do,
where you meet with small business owners and entrepreneurs
across the country to have a better understanding of the impact of
regulations, my understanding is that these really only relate to
regulations proposed by organizations like OSHA, CFPB, and EPA.
Would you favor expanding that coverage to additional agencies,
for instance, like NOAA, who is a part of the Department of Com-
merce?
Mr. CLARK. First of all, yes, you are absolutely correct. The
agencies you have mentioned are statutorily required to have these
panels. We have looked at several agencies. We have looked at Fish
and we have looked at the Department of Taxation. But we believe
that these panels generally are very beneficial to the small busi-
ness community and to the agency in formulating what should be
good agency policy as it specifically relates to small business. So,
we would definitely take a look at other agencies to see whether
or not the panel process fits within what can be done to improve
their regulatory process.
Chairman GOLDEN. Thank you very much, sir. I appreciate it.
At this point I am going to recognize the Ranking Member for
5 minutes of questions.
Ms. TENNEY. Thank you so much, Mr. Clark. Thank you for
your congratulations. It is certainly an honor to take the place of
the late, great Jim Hagedorn who we all remembered recently and
the great work he did on this Committee. So, I wanted to just ask
you, as a small business owner, I know, and also from an area that
7

is among the biggest agricultural regions in New York State, I hear
from business owners all the time about burdensome regulations
and they tell me that the Biden administration’s Updated Waters
of the U.S. would hurt their farms. This new regulation has been
narrowed again or broadened again. And also, restauranteurs who
are also very significant in our region are describing the Depart-
ment of Labor’s Tip Credit Rule impairs their ability to run their
business effectively and hurts entrepeneurs, especially those trying
to get in to the business with additional paperwork. Maybe you
could just tell us what you think in your experience, what are the
maybe top five most harmful regulations for small businesses that
are coming across your desk and just quickly what your response
has been.
I have a couple of other questions for you but I would love to
hear that first.
Mr. CLARK. Thank you very much for your question.
I am hesitating to answer that in a sense because I have a very
excellent staff of lawyers and I think each lawyer on staff thinks
that their regulations are as important as all regulations. So, run-
ning the risk of incurring their wrath when this hearing is over,
I think any regulation, all regulations are important to us if those
regulations have a way of stymying or prohibiting small business
growth, small business expansion, and small businesses continuing
to be the economic backbone of this country.
Ms. TENNEY. Let me just ask you this. As a lawyer, I can to-
tally understand that remark. You know, lawyers tend to think
they are more important than everybody else and their ideas are
more important than everyone. But we know that is not true. But
I will just give you an example. On the Waters of the U.S. law, that
is among the top priorities of the New York Farm Bureau, for ex-
ample, as cited as one of the biggest obstacles to their effective
management of their businesses and the ability for them to be com-
petitive, produce food, and provide food security for our commu-
nities. Would you say that that is like among a regulation that you
would see in a rural setting, the expansion of the Waters of the
U.S.?
Mr. CLARK. Yes. And that regulation not only in a rural setting
but in urban settings as well. And we actually have, as you well
know, or hopefully you know that we actually did provide a com-
ment to the EPA and Army Corps on that particular regulation,
and that would be one of the regulations that continues to be at
the top of our list of concerns. And we, too, have heard from small
businesses across the country in the areas of agricultural capacities
and other capacities regarding this attempt. So, it is——
Ms. TENNEY. We appreciate that work. I just want to move on
to the Office of Advocacy has consistently found that small busi-
nesses experience the burden of sort of ‘‘one size fits all’’ regula-
tions more deeply than other businesses and 99 percent of the busi-
nesses across America are actually small businesses. So, when we
put out these big sweeping regulations, we tend to hurt 99 percent
of our business community because they tend to be small busi-
nesses and they are employing people and families across our coun-
try.
8

About a year ago, this Committee Republicans sent a letter to
President Biden urging him to swiftly nominate a chief counsel for
Advocacy. Can you elaborate on how a chief counsel would help in
this situation? Would help the operation of the office in assisting
you and being able to meet the needs of our small business commu-
nity, particularly the ones that are fighting with some of these bur-
densome regulations. I just want to add before you answer that
quickly, President Trump made deregulation a top priority which
helped our business community. His Executive Order 13771 re-
quired that any new regulation be balanced by removing at least
two other regulations. Unfortunately, that Executive Order was im-
mediately revoked incredibly by President Biden. Could you com-
ment on the fact that your office says that burdensome regulations
hurt small business but yet the Biden administration has delib-
erately cut off our ability to minimize regulations?
And I believe my time has run out but I will leave that to the
Chairman.
Chairman GOLDEN. You are more than welcome to answer the
question.
Ms. TENNEY. If you could answer. Thank you.
Mr. CLARK. All right. Thank you very much.
Yes, President Trump’s administration did do an executive order.
It is what we call the 2-for-1 regulation. But I will also remind the
Subcommittee that even prior to that executive order, 610 of the
Regulatory Flexibility Act requires agencies to periodically review
regulations in terms of the impact of those regulations on small
business. And that has been part of the benchmark of the RFA
since its inception in 1980.
The other part of the issues as we look at this whole process is
the issue of alternatives. And alternatives become, again a bench-
mark within the RFA where we want to look at agencies, what
agencies are proposing in terms of their regulation and ensure that
those regulations have provided alternatives for small businesses
because we, too, recognize that a regulation, that one regulation
does not fit all entities. And therefore, part of the Regulatory Flexi-
bility Act requires agencies to provide meaningful alternatives for
small businesses when proposing regulations.
Ms. TENNEY. Thank you. When I get my second round, I want
to ask you about that RFA review and how many of those regula-
tions have actively been effective in removing burdensome regula-
tions. So, we will get to that in the second round. Thank you so
much. I really appreciate your answers.
Mr. CLARK. Thank you.
Mr. GOLDEN. We will now recognize the Vice Ranking Member
of the Committee from Texas’s 25th Congressional District, Rep-
resentative Roger Williams.
Mr. WILLIAMS. Thank you, Mr. Chairman, and Ranking Mem-
ber Tenney. And Mr. Clark, for you being here today.
I, too, like Ms. Tenney, am a small business owner, an auto-
mobile dealer for 51 years. Family 89 years. So, I am a small busi-
ness owner also.
The Biden administration continues to show their complete dis-
regard for the real issues facing America’s small businesses. Infla-
tion is skyrocketing, supply chain disruptions are leaving store
9

shelves empty. The worker shortage is hindering business oper-
ations and the pending Biden tax hikes have business owners con-
cerned that they will not be able to compete in the future. It is the
Office of Advocacy’s responsibility to assist and help represent
American small business interests with the federal government.
So, Mr. Clark, what are the top concerns you are hearing from
American small businesses right now and how do you ensure their
concerns are being heard at the highest levels of the SBA?
Mr. CLARK. Well, our responsibility, sir, is to really provide con-
cerns that we hear from small businesses directly to the agencies.
And we do that in various ways. We actually have roundtables. We
talk with small businesses across the country. We interact with
Members of Congress and their staff on various issues impacting
small business. And we then provide that information directly
where possible to the agencies in terms of——
Mr. WILLIAMS. But if I may interrupt you, Mr. Clark, my ques-
tion is, what are the concerns you are hearing from small busi-
nesses right now?
Mr. CLARK. We are hearing many of the same concerns——
Mr. WILLIAMS. If you are passing something on, what are you
passing on?
Mr. CLARK. We are passing on many of the same concerns that
you have that some regulations are overburdensome. Some regula-
tions are not necessarily beneficial to the businesses being able to
continue to be profitable. A lot of these businesses are actually
coming out of the COVID situation that we have had. They are now
trying to get themselves back on their feet.
Mr. WILLIAMS. Okay. Let’s move on. I appreciate you carrying
those and maybe I can help with some of the issues that are hurt-
ing small businesses.
As a small business owner for over 50 years, I know firsthand
that the free market gives businesses the opportunity to compete
and grow. Competition is the key word. However, the Biden admin-
istration is creating new and unnecessary regulations. We talked
about that. Overwhelming small businesses with more red tape and
administrative burdens.
American Action Form recently reported, and we have heard it
today, that last year alone the Biden administration had over 130
million new compliance hours, which is unbelievable for small busi-
nesses to execute these actions that they want us to do. And we
cannot expect small business owners whose resources are already
stretched thin to handle the increased costs and manhours that
come with the increased regulations. Businesses are already work-
ing within tight margins and compliance costs could be their tip-
ping point. And in many cases businesses are hiring more compli-
ance officers than they are salesman or loan officers. And so, busi-
nesses knew they would not be caught off guard by federal regula-
tions because for every regulation made we talked about two had
to be repealed by President Trump.
So, Mr. Clark, the Office of Advocacy is meant to act as a govern-
ment watchdog for small business ensuring the administration and
federal agencies are aware of how regulations will impact busi-
nesses and not go rogue on small business.
10

So, question. Does increasing compliance burdens and costs on
small businesses help them to succeed?
Can you hear me?
Mr. CLARK. I can, and I am thinking. We have not seen any
data to indicate that increased costs on compliance burdens help
small businesses to succeed.
Mr. WILLIAMS. So you are saying that high compliance bur-
dens, what we are saying, do hurt small businesses when they are
trying to succeed. They are a negative?
Mr. CLARK. Yes, sir. We have taken the position that one of the
things we want agencies to look at is the actual compliance costs
of the regulations as they affect small business. But also recog-
nizing that that compliance cost has a disproportionate impact on
the size of that small business.
Mr. WILLIAMS. Okay. Thank you.
One other question, too. So, we talk about regulations. What
about raising taxes? Do you think that helps them succeed like
President Biden wants to do?
Mr. CLARK. We have not looked at the issue of the impact of
raising taxes. But the issue of raising taxes is very similar I would
suggest to other issues in which that cost has to be factored into
the businesses’ operation. And thus, ultimately, that cost in some
ways will be passed on to consumers or sold by that business.
Mr. WILLIAMS. Well, I see my time is up. I have got more ques-
tions but I yield back, Mr. Chairman.
Chairman GOLDEN. Thank you very much, sir.
I think certainly it sounds like people have other questions so we
will do a second round.
I wanted to give you the opportunity, sir, to talk a little bit more
about how Congress can better help your office so that you can do
an even better job advocating for small businesses. So, I know you
referenced the Small Business Advocacy and Improvements Act. I
have also seen that the president’s proposed budget would increase
your budget modestly by about $750,000 from FY22 enacted levels.
You are sitting at about $10 million, I think annually. So, what can
we do in partnership with you to make sure that you can do more
good work for small businesses around the country?
Mr. CLARK. Thank you very much, Chairman, for that, for that
question. And I appreciate that. I appreciate that question.
One of the things that we find that is very effective as we con-
tinue to represent small businesses is to get input from small busi-
nesses across the country in terms of issues that are impacting
them. So clearly we work with many Members of Congress, many
Members of this Committee on various issues in their jurisdiction.
And that helps us also to present a more total picture to the agency
when we talk about impacts of those regulations. So, we first of all
would welcome, and continue to welcome that support from the
Members of this Committee throughout the United States.
The other area that we are looking at and we continue to recog-
nize, and as you mention our budget, it is also important to realize
that our budget has stayed flat for the last 5 or 6 years and the
money that has been placed there now really takes care of cost of
living increase and other factors that we had to absorb without an
increase. Some of that money will also be used to allow us to de-
11

velop and reach out and get better economic research tools so that
those tools can hopefully give us better data on impacts and be able
to then provide this Committee with better information on policy
actions.
Chairman GOLDEN. Thank you. Could you give us an example
of ways in which Advocacy works with federal agencies on the ac-
tual drafting of regulations to help them achieve the intended pol-
icy goals without unduly harming small businesses? And are there
any relationships that your office has with agencies out there
where you feel like it is a good model for other agencies to look at
how to best utilize your office to get their regulations right without
harming small businesses?
Mr. CLARK. Thank you for the question. And yes. I will say that
this office has moved in a very positive way since I came on board
in Advocacy in 1998. We work internally with the regulatory com-
ponents of the various agencies. Each advocate, each lawyer within
the Office of Advocacy has a portfolio and that person works with
their regulatory component. Many times, we are working with
those regulatory components before the regulation is actually pub-
lished. And a lot of that has resulted in a much better regulation.
In addition to that, by statute, we are now required to provide
training to all federal agencies, the regulatory components, and
that also has enhanced our exposure to the agency but it has also
enhanced the agency’s understanding of what we do, why we do it,
and how we do it. And it also ultimately has resulted in agencies
understanding that we are there to ensure that they come out with
the best regulation, but that best regulation should be very sen-
sitive and reflect the concerns of small business.
Chairman GOLDEN. Thank you.
Representative Tenney?
Ms. TENNEY. Thank you. I would love to go back and address
that issue again. You mentioned Section 610 of the Regulatory
Flexibility Act. I just wanted to follow up a little bit on comparing
it to the effectiveness of President Trump’s executive order which
eliminated regulations. I was just wondering if you could actually
tell us that through the Regulatory Flexibility Act, did we actually
eliminate any regulations or change them to benefit small busi-
nesses by the nature of the review of that agency? Because I am
concerned that we can talk about it but President Trump’s Execu-
tive Order actually eliminated those regulations which had a huge
impact on the ability of small businesses to thrive, compete, and
the rise of entrepeneurs, the growth in our economy, and now we
are seeing huge problems with work force and supply chains and
I just wonder if you could just say in the RFA, did we actually ef-
fectively implement the cutting of regulations and benefit small
businesses? And if you could cite, you know, a couple of examples
I would really appreciate that.
Mr. CLARK. Sure. And yes, I would say that the 610 has been
effective as we move through the process. I know as one example,
SBA made some changes to its 8(a) regulation as a result of a 610
review. I know that there have been other changes by other agen-
cies. I do not have a detailed list of those. I would be happy to pro-
vide those to you and to the Committee. But 610 has been there.
It has been used by agencies, and we continue to work with agen-
12

cies to ensure that antiquated components of the regulatory process
are eliminated.
I know, for example, with the FAR Council, there has been elimi-
nation of various components dealing with the receiving of certain
types of electronic transmission which is just antiquated based on
the technology that we have today. Like you know, there has been
movement and improvement in things like accepting signature on
documents, electronic signatures on documents as opposed to those
documents having to be signed directly as have been some of the
regulations in the past. So, there is a whole series of those types
of situations out there but I will be happy to provide the Com-
mittee with more detail of those.
Ms. TENNEY. I would appreciate that.
Also, just one more thing on that. If the RFA and 610 is actually
effective and it can change rules, in your opinion, and I am asking
you for your opinion, do you think that under the Waters of the
U.S., for example, this broadened EPA designation that is hurting
our agricultural community, do you think that an RFA Committee
could actually strike down and narrow that definition under
Waters of the USA that is hurting our farmers? Is that something
you think we could effectively do through your office and through
the RFA?
Mr. CLARK. Well, the RFA is considered to be a procedural stat-
ute, so we do not have the substance of ability to strike down a
particular regulation. We do have, however, the ability to request
a review or a panel process that was talked about earlier. So, our
panel process to solicit and get a better understanding of the im-
pact of those regulations on small business. But the RFA does not
give us statutory authority to actually strike down a particular pro-
posed regulation.
Ms. TENNEY. Right. Let me just read for your information. It
says, ‘‘Agencies, under the RFA, the Regulatory Flexibility Act, re-
quires the federal agency to consider the impact of a regulatory
proposal on small entities.’’ And so, the agency can certify you are
not an agency. So, if you do not certify, for example, the Waters
of the U.S., does that mean that is a step towards striking down
the Waters of the U.S. regulation that would benefit our farmers?
Is that something that would be sent back and we could actually
go through the regulatory process and have that, for example, have
EPA take that into consideration in either striking down or nar-
rowing their definition under the new Waters of the U.S.?
I know Mr. Boland has got his lobsters which we are grateful for
him to preserve them. I am a huge lobster lover and Maine lover.
I am just saying, I want to know about the effectiveness. Can your
office, you are an office full of lawyers, Office of Advocacy, if you
had an actual chief counsel, can we do that effectively to actually
implement real change in the regulatory process, which everybody
knows this is a big burdensome problem that we have in the
United States is this growth in our bureaucracy and the ability of
regulations to overwhelm even rights and the ability of our small
business community to thrive. We see that on a number of scores.
You know, the Chevron decision gave deference to these regulatory
agencies and we want to empower our small business community
on the Small Business Committee here, especially those in the Ag
13

world and so, and our small business community. Which actually
in New York State is, you know, agriculture is among one of our
top businesses actually in New York.
Mr. CLARK. Yes. The certification component that you are ref-
erencing is one in which we have consistently and as necessary in-
formed the agency that there is a particular certification lack, a
significant factual basis, and that the certification had to be
redone. In the alternative, we have strongly suggested that an ini-
tial regulatory flexibility analysis be done as opposed to attempting
to certify the rule. And a lot of that is discussed as we train agen-
cies in terms of those components and we find more and more
agencies willing to do the initial regulatory flexibility analysis as
opposed to just trying to certify the rule.
Ms. TENNEY. Thank you.
I think I am over my time. I yield back.
Chairman GOLDEN. It sounds like the Congresswoman would
like to have an SBAR panel specific to this issue which might even
be a real possibility given that it is EPA that she is talking about.
Representative Williams?
Mr. WILLIAMS. Thank you, Mr. Chairman.
A couple things. I am excited to hear as a business guy, you are
one of the first persons, if not the first person in the Biden admin-
istration to tell me that you agree that raising taxes is bad for
small business and raising regulations is bad for small business.
So, I appreciate that attitude.
A couple questions real quick. You all are independent, but how
do you stay independent with this administration that is totally di-
visive?
Mr. CLARK. Well, we stay independent because we are not par-
tisan in any way with the issues. We look at the issues as they im-
pact small business and we call those issues as they are. And we
are not in any way political. I am not a political appointee in any
way. I am a bureaucrat in the context of that structure. My staff,
the same way. So, we work our job as created by you, Congress,
is to represent small business. And we do that notwithstanding the
other situations that may be out there.
Mr. WILLIAMS. Well, I appreciate that. As it should be. So, we
have got people in other agencies that do not feel that way.
But anyway, moving on. As a small business owner, and you
hear this. You hear from small business people, inflation is the
number one concern that really we all have. What can you tell
small business on how the best way to deal with this inflationary
environment we are in. I am old enough, as you are. I go back to
1981 when we had high inflation, high interest rates. What would
your recommendation be to a small business owner saying what
should I do with this inflation?
Mr. CLARK. I probably go back to 1976. But——
Mr. WILLIAMS. So do I, unfortunately. 1971 as far as gas.
Mr. CLARK. Clearly, one of the biggest issues with inflation with
small business and you have said it and Ranking Member Tenney
said and Chairman Golden has said it and we say it continuously
is that small businesses operate from a very small margin. And
with that, as inflation increases, small businesses have to become
innovative. I know for a fact that in the restaurant industry, many
14

small businesses are apologizing but yet they are increasing their
prices on various meals and various food products to deal with that
not only supply shortage but also with that inflation.
The other aspect of this, I think small businesses have to con-
tinuously be innovative in finding different ways to continue to pro-
vide the services they do. And as you well know, small businesses
are the most resilient and innovative businesses in this country.
They have survived inflation. I very firmly believe that they will
continue to find ways to sell their product, to be productive, to pro-
vide food on the table for the family, and all those things that they
do.
Mr. WILLIAMS. Thank you. And small business is, as you know,
more than half the jobs, half the businesses in our country.
Real quickly, what I hear from all my people back in Texas and
you hear it too, is how hard it is to hire anybody. Nobody wants
to work. You cannot get a workforce. You cannot sell the product.
You cannot deliver the product. So, with all that we know about,
you have some vacant positions. Have they affected your oper-
ations, your ability to assist and properly represent the interests of
small businesses, people like me and Ms. Tenney?
Mr. CLARK. The vacant positions that we have are our regional
advocate positions. As the Chairman mentioned, we just hired a re-
gional advocate for Region 1. We have some other regional advo-
cates, some other candidates that we are examining and having
conversation with. But overall, our ability to be responsive to our
stakeholders continues to be extremely high. Our lawyers are very
active in their various areas with small businesses across the coun-
try in the areas that they deal with and we do that through re-
gional roundtables. We have listening sessions. We are constantly
reaching out to small business trade groups. So, our ability to be
effective continues. I think continues to be very high.
Mr. WILLIAMS. Well, you have seen in your own industry, or
your office. But anyway, do not send me those lawyers. Send me
some car salesmen. Okay?
Mr. CLARK. Alrighty, sir.
Mr. WILLIAMS. I yield back. Thank you.
Chairman GOLDEN. We are going to recognize Representative
Stauber from Minnesota’s 8th.
Mr. STAUBER. Thank you very much, Mr. Chair.
As everyone well knows, small business owners, farmers and
ranchers were very negatively impacted by the Obama era Waters
of the United States, the Waters Rule. It expanded federal jurisdic-
tion far beyond what was authorized by Congress and resulted in
the burdensome requirements and widespread legal uncertainty for
Americans across this nation.
The Trump administration rightfully chose to heed the concerns
of these small entities and created the Navigable Waters Protection
Rule. Unfortunately, the EPA is back to interpreting the Waters
Rule and actually announced their intention to revise the Waters
Rule and make it even worse.
Mr. Clark, as the leader at the Office of Advocacy, can you tell
me what you have done to illuminate the concerns of small busi-
ness owners to the EPA as they look to revise this rule?
Mr. CLARK. Thank you for your question, Congressman.
15

Yes, we have worked with the EPA. We have worked with the
Army Corps of Engineers on their intent. We have actually sub-
mitted a formal comment letter which I will make available to you
if you have not seen it, but we have expressed to EPA, we have
expressed to the Army Corps the concerns that we have.
Mr. STAUBER. And with that, has the EPA committed or have
they shown even any willingness to follow your recommendations
and convene an official small business panel in accordance with the
Regulatory Flexibility Act?
Mr. CLARK. I need to get a more current response from the law-
yer that is handling that for us but the last time I looked which
was just a couple days ago they have not.
Mr. STAUBER. So the EPA has not responded to your concerns.
My next question is can you explain why going through an offi-
cial SBRIFA panel is so important to understanding the significant
economic impacts the Waters Rule will have on small businesses
and small entities?
Mr. CLARK. Sure. The SBREFA panel would actually allow
small entities to come forward and to present their view and their
viewpoints on the proposed rule before that rule becomes a final
rule. This we have found to be very effective with several other
agencies. So, it gives small businesses this opportunity to present
their concerns in a very formal way and gives the agency an oppor-
tunity to ask direct questions to those small businesses regarding
what they are proposing to do.
Mr. STAUBER. Well, I think that we have all agreed that small
businesses are the engine of our economy and they certainly should
have a seat at this table.
What can we do to support you as you try to fight off the Biden
administration and their army of regulators that hold our small
business owners in such contempt? And I will give you an example.
The Biden administration’s own numbers in 2021 were $201 bil-
lion. That is B. $201 billion of additional regulations and regu-
latory burdens on our small businesses. What are you doing and
how can we support you in defending small businesses against this
type of assault?
Mr. CLARK. Well, Congressman, thank you for your question.
Our statutory authority, which this Committee was responsible for
generating some years ago, continues to be the basis for our ability
to represent small businesses. So, continuing to have that ability
is very critical for us. We always like to hear from small businesses
directly as to the issues they are facing, so our system is very open.
You call us and you are not going to get a voice message that says,
you know, call back some other time.
Mr. STAUBER. And I do appreciate that. Just with my 20 sec-
onds remaining a couple things. Would it be your opinion that an
additional regulatory burden on small businesses to the tune of
$201 billion, is that good or bad for small business?
Mr. CLARK. Well, anytime there is a regulatory burden as I
stated earlier, we have to look at the cost of compliance of that reg-
ulatory burden. And that cost of compliance for small businesses is
not a uniform cost that complies because our businesses vary in
size. And so, we have to look at all of that in terms of what the
specifics of those burdens are and how those burdens specifically
16

impact the various sectors. But we have always positioned our-
selves to believe through statute, through economic research that
we want agencies to consider cost of compliance and consider alter-
natives as the primary enforcement mechanisms for the RFA.
Mr. STAUBER. Thank you for your answer.
Mr. Chair, I would like to enter the comments of the Office of
Advocacy submitted to the EPA regarding the proposed rule revi-
sions to Waters. And I yield back.
Chairman GOLDEN. Thank you very much.
That is going to conclude the Q&A here, sir. We appreciate you
taking the time to answer our questions and be with us here today.
I will just say in closing that everyone here knows and agrees
that America’s small businesses are critically important to the
country. Everyone knows that. Nearly half of the private workforce
comes from small businesses and of course, it is 99 percent of our
economy. The work that your office does we think obviously is very
important. I think it is very hard for small business owners to keep
up with the regulatory process. It is often hard for them to even
know when rules are being pushed out and even harder to inter-
pret them and know how to deal with them. I certainly have known
many small business owners who feel a lot of frustration in not
knowing how to engage with the government and make sure that
their feedback is being received. So, your office obviously, that is
exactly what your mission is. So, I look forward to continuing to
work with your team up in Region 1 as we are talking to small
business owners and funneling them to your office so that we at
least are giving them the opportunity to provide feedback, whether
that is upstream from new regulations that they see being devel-
oped or comment after the fact on how it is impacting them. So,
we appreciate the work that you all do in the region very much and
thanks for joining us here today.
Representative Tenney, did you want to say anything?
Ms. TENNEY. Sure. Thank you so much. And thanks for holding
this meeting. Great to hear form you, Major Clark. We really ap-
preciate your work, your testimony, and we are hoping that we can
continue to give you the support and give you the people that we
need to protect our small business communities. So, we still have
a lot of questions but I am sure that you will be submitting those
for the record. And I just want to say thank you again for your
service and for doing what you do for small business. Thank you.
Mr. CLARK. Thank you. Thank you, Chairman and Members of
the Subcommittee.
Chairman GOLDEN. Well, thank you again, sir.
Without objection, Members have 5 legislative days to submit
statements and supporting materials for the record. And if there is
no further business to come before the Committee, without objec-
tion, we are adjourned. Thank you.
[Whereupon, at 11:01 a.m., the subcommittee was adjourned.]
17

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