James Goodwin on CPRBlog {Bio}
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SBA Office of Advocacy Continues to Carry ‘Water’ for Big Business

Apparently undeterred by all the bad press it has received lately, the Small Business Administration’s (SBA) Office of Advocacy has cast its controversy-attracting lightning rod ever higher in the air by issuing a feeble comment letter attacking the Environmental Protection Agency’s (EPA) pending rulemaking to define the scope of the Clean Water Act (“Waters of the US rule”).  The letter is just the latest evidence that the SBA Office of Advocacy has no interest in working to advance the unique interests of real small businesses—in accordance with its clear legal mandate—but instead is entirely focused on seeking to block those rules that are opposed by large business interests and their conservative allies.  

In its recent scathing report, the Government Accountability Office (GAO) raised several disturbing questions about whether and to what extent the SBA Office of Advocacy is actually fulfilling its statutory mission of serving as a “voice for small businesses within the federal government.”  Of immediate relevance here, one of the key issues identified in the report was that the SBA Office of Advocacy was never able to provide any evidence of small business input it received to inform its decision intervene in rules or the substance of its comments letter.  In other words, the SBA Office of Advocacy could never prove that its interventions were every actually prompted by small business concerns.  As described below, the SBA Office of Advocacy’s comment letter on the EPA’s Waters of the US rule only adds to these questions—and its provides additional impetus for needed reforms and increased congressional oversight to ensure that the agency is not wasting taxpayer money and helping large businesses to the direct detriment of the small firms they are supposed to be helping.

 

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Crain and Crain are Back, and This Time They're Working for the National Association of Manufacturers

Having thoroughly tarnished their own reputations as well as that of the Small Business Administration’s (SBA) Office of Advocacy, economists W. Mark Crain and Nicole V. Crain are now preparing to make the big leap from thoroughly discredited academics to straight up shills for corporate lobbyists working to undermine public protections.  The National Association of Manufacturers (NAM), an industry trade group that vehemently opposes such policies as cleaning up air pollution and improving worker safety, yesterday announced that it will release a report tomorrow, prepared by the Crains, that purports to measure the “annual cost of federal regulations.”  That’s essentially what the Crains have been claiming to do for the Office of Advocacy until now, so it’s good news that at least it won’t be taxpayer money that’s footing the bill for their slanted research this time.

Just to review the bidding, in 2010, the SBA Office of Advocacy rather infamously sponsored a similar report by the Crains.  The key finding of the 2010 Crain and Crain report, which antiregulatory members of Congress and allied business groups and advocacy organizations have wasted little opportunity to cite, purported to find that the total costs of federal regulation in 2008 was $1.75 trillion.  

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No, the GAO Didn’t Say EPA’s Cost-Benefit Analyses are Bad—But Here’s What We Should Take Away from Their Report

If you’re an antiregulatory, anti-environment member of Congress, such as Sen. David Vitter (R-LA) or Darrell Issa (R-CA), how do you get the Government Accountability Office (GAO) to issue a report that criticizes the cost-benefit analyses that the Environmental Protection Agency (EPA) has performed on some of its recent rules?  That’s easy—you simply ask for one.  Then, when the GAO issues the report, like it did a few weeks back, you can begin issuing press releases filled with invective and righteous indignation.  The report’s findings, you can assert, are smoking-gun evidence that the EPA is running amok, issuing burdensome rules that are harming small businesses and families.  And just like that, you’ve conjured the latest antiregulatory, anti-EPA scandal du jour out of thin air.

Vitter and Issa have followed this playbook to a T and will no doubt continue trying to spin political gold out of this meaningless hay as part of the Republican’s broader strategy of using antiregulatory rhetoric to undermine the work of the Obama Administration while simultaneously boosting their electoral prospects in the fast approaching mid-term elections.  “Rather than using a fair and open rulemaking process, EPA pushed through regulations using sloppy analysis without sufficiently informing Congress or the public of the economic impact,” Issa predictably huffed following the report’s release.

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The GAO’s Scathing Report on the SBA Office of Advocacy: 15 Big Revelations

As I noted here last week, the Government Accountability Office (GAO) published a report that delivered a scathing review of the Small Business Administration’s (SBA) Office of Advocacy.  The GAO report’s general objective was to assess whether and to what extent the SBA Office of Advocacy is fulfilling its core mission of serving as a “voice for small businesses within the federal government,” and accordingly looked at two of its most important activities for carrying out that core mission: sponsoring small business-centered economic research and participating in individual rulemakings that have a significant impact on small business interests.

In contrast to most GAO reports—which are conspicuous for avoiding controversy and their dry, moderate tone—this one offered some uncharacteristically strong criticisms of the SBA Office of Advocacy.  For example, after rejecting the SBA Office of Advocacy’s feeble excuses for not taking any steps to verify the quality of information contained in a series of controversial studies on regulatory costs that the agency had sponsored, the GAO report opined, “We acknowledge that these reports may not necessarily be representative of all Advocacy’s research efforts, but not substantiating the quality of the information in even one study could call into question the credibility of Advocacy’s research program.”  (See page 15.)  Elsewhere, the GAO report took the SBA Office of Advocacy to task for its complete failure to document their roundtable discussions, noting that this failure made it “difficult to determine the extent to which small businesses and related entities were represented at these events.”  (See page 18.)

If the GAO seems frustrated, it’s for good reason.  Their review of the SBA Office of Advocacy’s activities produced the following 15 disturbing revelations:

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CPR’s Persistent Watchdogging of Embattled SBA Office of Advocacy Prompts Scathing GAO Report

Earlier today, the Government Accountability Office (GAO) published a scathing report, criticizing the regulatory work and research conducted by the Small Business Administration’s (SBA) Office of Advocacy.  For the past several years, CPR has worked to bring much-needed attention from policymakers, the press, and the public interest community to the SBA Office of Advocacy, which has long leveraged its powerful position in the rulemaking process to oppose stronger safeguards necessary for protecting people and the environment.  Critically, as CPR’s work reveals, the beneficiaries of the SBA Office of Advocacy’s interventions have been large corporations and trade groups, to the detriment of the small businesses they are actually supposed to be helping.

The report, Office of Advocacy Needs to Improve Controls over Research, Regulatory, and Workforce Planning Activities, was conducted in response to a request for a review of “Advocacy’s activities” from the Subcommittee on Financial Services and General Government within the Senate Committee on Appropriations.  The report notes that the subcommittee’s request was made because “[q]uestions have recently been raised about Advocacy's efforts to represent small businesses in regulatory activities and some of its research on small business issues.”

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Regulatory Tsunami? What Regulatory Tsunami?

Sometime last Friday—the Friday before the Memorial Day holiday weekend—the Obama Administration quietly issued the Spring 2014 Regulatory Agenda.  It’s becoming something of a tradition for the Administration to release this semiannual document on classic “take out the trash” news days in this fashion.  The Fall 2013 Regulatory Agenda was similarly released to whatever the opposite of fanfare is on the day before Thanksgiving, while the Spring 2013 Agenda came out the day before Independence Day.

It’s hard to blame Obama’s political folks for resorting to these kinds of tricks to bury the news about the release of the regulatory agenda, since it always elicits the same “the sky is falling” panic from corporate interests and their allies in Congress and conservative think tanks.  They issue their press releases and reports—indignant outrage on full display—about how the regulatory agenda supplies the latest evidence of the Obama Administration’s so-called “regulatory tsunami” or “flood” or “avalanche” or whatever overblown meteorological metaphor happens to strike their fancy on that particular day.

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CPR Member Scholars to Congress: Judicial Review Provisions of CFTC Reauthorization Bill Need Another Look

Yesterday, CPR Member Scholars sent a letter to House Representatives about their concerns with Section 212 of H.R. 4413, the Consumer Protection and End-User Relief Act.  This provision would add a new Section 24 to the Commodity Exchange Act, establishing specific requirements for judicial review of rules adopted by the Commodity Futures Trading Commission (CFTC).  H.R. 4413 is on the short list for a floor vote in House.

As the letter explains, several aspects of Section 212 “raise significant problems.”  One provision would authorize courts reviewing CFTC rules to modify and enforce as modified those rules.  This is a huge departure from how judicial review of rules normally takes place, including judicial review carried out under the Administrative Procedure Act, which essentially authorizes a court to only affirm or set aside a rule in whole or in part. In other words, the Courts interpret laws, they do not write them.  Of this provision, the Scholars write, “Our system of government simply does not contemplate granting a court the regulatory power both to reject an agency’s rule and then force adoption of a different rule preferred by the court itself.”

Another provision of Section 212 would allow any parties involved in a judicial challenge to a CFTC rulemaking to apply to the court “for leave to adduce additional evidence,” provided that the party can show “that the additional evidence is material and that there was reasonable ground for failure to adduce it before the Commission.”  This change would be unprecedented and generally applies, if ever, to court challenges to agency orders. This change would open the door to special interests inserting themselves even further along in the regulatory process, slowing down implementation of needed rules even further. Given that those interested parties would be free to submit to CFTC any and all evidence they wish on a particular CFTC rule, there should be no “reasonable ground” for those parties to fail to submit such information during the rule-making process, rather than later during litigation.

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Better Late Than Never: OIRA’s Meeting Logs Just Got a Lot More Transparent

This week the Office of Information and Regulatory Affairs (OIRA)—the obscure White House Office charged with reviewing and approving agencies’ regulations—took an important and much-appreciated step in the direction of greater transparency by updating and improving its electronic database of lobbying meetings records that the agency holds with outside groups concerning the rules undergoing review.  As detailed in a 2011 CPR report, corporate interests have long used OIRA as a court of last resort for seeking relief from regulatory requirements they find inconvenient; these lobbying meetings provide them with a powerful and secretive forum in which to push for substantive changes to critical agency safeguards that would ensure the public continues to bear the cost of their polluting activities.  With the improved database, the public, policymakers, and the media will be better able to track the efforts of corporate interests to exploit the OIRA review process to weaken or block regulatory protections.

Before the upgrade, OIRA docketed all its meetings in a barebones and often careless fashion on a separate section of its website.  As the 2011 CPR report explained, the meetings dockets suffered several serious flaws.  The meetings were not linked to the rule undergoing review that was the subject of the meeting, nor was there any standardized format for documenting what rule was the subject of the meeting.  Often, interested members of the public would have to consult a number of different sources to verify what rule was at issue in a given meeting.  To make matters worse, key meetings log data—including the attendees of the meeting and their affiliations—were often rife with typos and inaccurate or incomplete information.  These log data were also supposed to provide links to all documents presented at the meeting, but in some cases the links do not work.  Even when accurate, the meetings data were of limited utility because they were not presented in a searchable database.  If, for example, a member of the public wanted to see how many meetings took place with regard to a particular rule, he or she would have to assemble these data manually.  CPR sought to overcome this problem by creating its own searchable meeting database, which available here.

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CPR Member Scholars Send Letter to Senate Criticizing “Attempted Misuse” of the Congressional Review Act

Yesterday, 13 Member Scholars of the Center for Progressive Reform (CPR) sent a letter to the U.S. Senate expressing their concern about S.J. Res. 30, a Congressional Review Act (CRA) “resolution of disapproval” introduced by Senate Minority Leader Mitch McConnell (R-KY) that seeks to block the Environmental Protection Agency’s (EPA) proposed Clean Air Act New Source Performance Standard (NSPS) to limit greenhouse gas emissions from future fossil-fueled power plants.  Drawing on their many years experience in administrative law, the Member Scholars make the case that McConnell’s proposal is at odds with the CRA, because it seeks disapproval not of a final regulation, but of a regulation that has merely been proposed.  “By attempting to subject a proposed rule—as opposed to a final rule—to this process,” they write, “S.J. Res. 30 is contrary to the statutory language and could raise questions as to the legitimacy of any resolution of disapproval.”

Some history is in order.  Senator McConnell introduced S.J. Res. 30 in January, and in a slap in the face to, well, everyone, he fired off a letter to the Government Accountability Office (GAO) raising the very issue that the CPR Member Scholars are now flagging:  He asks them to “review” Congress’s ability to use the CRA to force an up-or-down vote to stop the EPA’s proposed NSPS. As explained below, what McConnell hopes to use the CRA for is to prevent any kind of rule that resembles the proposal to go forward.  The GAO has not yet responded to Senator McConnell’s inquiry, but he seems determined to move ahead with the resolution anyway.  Incidentally, the GAO FAQs page on the CRA seems to suggest that the GAO presumes that the CRA does not apply to proposed rules.  One question asks: “Should agencies submit proposed rules to GAO? [i.e., to initiate the CRA process].”  The answer provided states: “No. Agencies should only submit major, nonmajor, and interim final rules to GAO.

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The “Best” Regulatory System Money Can Buy: Lessons from North Carolina’s “Regulatory Reform” Movement

For years, Duke Energy has enjoyed virtual free rein to contaminate North Carolina’s surface and ground waters with arsenic, lead, selenium, and all of the other toxic ingredients in its coal ash waste in clear violation of the Clean Water Act and other federal environmental laws.  And it seems that both North Carolina’s regulators and state legislators are determined to keep it that way.

Last year, the state’s environmental agency actively thwarted citizens’ efforts to sue Duke for violating the Clean Water Act by intervening in the lawsuit at the last minute and then settling with the company for just over $99,000—chump change for a company worth more than $50 billion—and no obligations to clean up their coal ash waste sites or prevent future pollution.  As detailed previously on CPRBlog, the head of the state’s environmental department—appointed by Gov. Pat McCrory, a former executive at Duke who had worked for the company for nearly three decades—promised that he would work as a “partner” to regulated industries in the state.  Federal prosecutors are now looking into whether North Carolina’s environmental regulators engaged in any criminal activity in their efforts to shield Duke.

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