Under Fire

The SBA's Office of Advocacy faces the fight of its life.
Magazine Contributor
4 min read

This story appears in the March 1997 issue of Business Start-Ups magazine. Subscribe »

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."

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.

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