You may not consider the U.S. Small Business
Administration's Office of Advocacy a hotbed of controversy,
but below the surface runs a stream of wildly disparate accounts of
the office's validity.
Established in the mid-1970s to give small business
representation, research and policy analysis, the Office of
Advocacy in its heyday had a staff of 75 and a research budget of
$5 million. Today, staff has been reduced to 48 and the research
budget zeroed out, with a stipulation allowing the SBA
Administrator to redirect monies of up to $700,000 to
small-business research.
"The problem is the government knows a lot about virtually
everything except small business," says chief counsel of the
Office of Advocacy Jere Glover. "We know more about broccoli
than we do about small business."
Content Continues Below
The office's strongest foe seems to be Rep. Michael Forbes
(R-NY). Forbes, a member of the House Appropriations Committee,
previously recommended zeroing out the entire budget, and he may do
it again this year. Contending that the Office of Advocacy is
"an unwieldy, inefficient and costly endeavor that yields
little to nothing to the taxpayer," Forbes proposes channeling
the office's research functions to the Census Bureau and its
advocacy roles to the SBA Administrator.
Glover responds that this year, the office has filed more than
100 letters with agencies, raising concerns about small-business
regulation--almost twice the typical amount. The office has been
closely involved with the White House Conference on Small Business,
state and local conferences, and Congressional hearings.
In fact, Glover says, the recent pension reform occurred after
an Office of Advocacy study found most small businesses didn't
have pension plans due to paperwork and regulatory costs. The
office worked with the White House and Congress to develop a new
pension proposal, brought officials together with small-business
groups and fashioned a compromise. "As a direct result of
[our] research," says Glover, "there is a much simpler
pension plan."
Disabling the office could pose "a significant
problem," says James Morrison, a senior policy advisor with
the National Association for the Self-Employed. "The Office is
the eyes and ears of small business [to] federal regulators. If the
Office of Advocacy is unprepared to play on a level playing field
when onerous regulations are proposed, many people are going to
find themselves with a lot more regulation."
Now, perhaps no one needs an advocate more than the Office of
Advocacy. Asked whether they'd be willing to show support, Sen.
Christoper Bond (R-MO), chair of the Senate Small Business
Committee, had no comment; Rep. James Talent (R-MO), chair of the
House Small Business Committee, stated, "Although I am willing
to listen to Mr. Glover's concerns, I am not convinced economic
research is the best way to use agency funding. I think small
business is better served by using any additional [SBA] funding to
ensure government compliance with the Small Business Regulatory
Enforcement Fairness Act and the Regulatory Flexibility Act, and to
improve the 7(a) program."
We at Entrepreneur know firsthand how the SBA Office of
Advocacy works behind the scenes to promote small-business
interests. Glover has been diligent in providing us with
statistical information for our studies and has taken the
initiative to inform us immediately of legislative or political
threats to small business.
It's hard to understand why an office with so many
responsibilities and so few resources must once again fight for its
very existence. Should the SBA Office of Advocacy die a quiet
death, many small-business owners would most likely not feel it or
even hear of it at first. But the effects would eventually reach
their businesses. We only hope entrepreneurs realize this before
it's too late.