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May 12 2009, 6:30 pm

Revealed: The Agency That Dissented

Let's solve a mystery: which government agency warned the Environmental Protection Agency that its rule-making process on greenhouse gas emissions could have "serious economic consequences?" 

According to an administration official, the comments, which were collected by the Office of Management and Budget and sent to the EPA, came from staff at the Small Business Administration's Office of Advocacy.

If you think the Office of Advocacy's job is to be an advocate for small businesses, you'd be right. In fact, the OOA is a Congressional chartered, independent agency within the SBA.  Its director is a political appointee, and its staff are not career members of the civil service. Many of them have been at the job for years, and it would not be uncharitable to assume that they're familiar with the language used by corporate America. 

The previous "chief advocate" left before President Bush's term expired, and Bush installed a temporary chief to manage the transition. That chief -- Shawne McGibbon -- remains in charge of the OOA and its staff. According to this directory, regulatory reviews are handled by someone named Joseph M. Johnson. Johnson once served as a research fellow at the Mercatus Institute at George Mason University, an organization that is well respected and takes a skeptical view of government regulation.

A spokesman for the agency did not immediately return an e-mail seeking comment.

To sum: a small independent agency chartered to help small businesses was responsible for a single dissenting warning transmitted to the EPA by the Obama administration. No other government agency shared the same concerns.

Comments (4)

PeorgieTirebiter

Becoming concerns only if the EPA, against all odds, began targeting business' they've assiduously avoided in the past. And there's zero chance of that changing in the midst of this downturn.
I hope BHO has hired someone to isolate all the goat gifts that Cheney left behind.

Voicing such concerns is what the SBA Office of Advocacy does -- other agencies would voice other concerns. I think there's probably some overattribution of political intent to this action by the Advocacy office, and apparently some misunderstanding of the role (and, frankly, prominence) of this "impact on small entities" issue within the Federal rulemaking process (EPA is not in a rulemaking stage here, but will get there -- SBA is voicing concerns about its assigned constituency as part of the normal agency interaction process). Since the Regulatory Flexibility Act of 1980, all significant federal rulemakings have to give consideration to the impacts of the proposed or final rule on small entities (businesses, governments, local entities of various forms) -- SBA has definitions of what a small entity is for most industries and activities -- it's usually driven by employee counts or annual revenue levels. Each rulemaking has to include a Regulatory Flexibility Analysis (a "reg flex") as part of its broader Regulatory Impact Analysis (RIA), and if the reg flex analysis shows that a significant proportion of small entities within an affected industry or sector are adversely affected (usually due to the cost of compliance or to an impact to their revenues), the rulemaking agency has to identify possible changes in the rule that could ameliorate these impacts, and then explain why it has chosen not to enact those changes in the final rule. The Office of Advocacy at SBA is the birddog on these issues and has been a very energetic advocate for meaningful analysis by rulemaking agencies of these kinds of impacts and how they might be mitigated. What happened is a normal part of the run up to a very significant rule; that it was misrepresenteded and blown out of proportion is probably partly due to malice and partly due to ignorance in the press and elsewhere of this part of the rulemaking process and the interactions between rulemaking agencies and other independent agencies like SBA.

by the way, does a copy of this SBA memo exist anywhere?

and background on the Regulatory Flexibility Act of 1980 -- it's the law!

http://www.ombwatch.org/node/214