SBA Office of Advocacy: Overview, History, and Current Issues

February 9, 2015 – March 30, 2022 R43625

SBA Office of Advocacy:
Overview, History, and Current Issues
Updated March 30, 2022
Congressional Research Service
https://crsreports.congress.gov
R43625

SBA Office of Advocacy: Overview, History, and Current Issues

Summary
The Office of Advocacy (Advocacy) is an “independent” office within the U.S. Small Business
Administration (SBA) that advances “the views and concerns of small businesses before
Congress, the White House, federal agencies, the federal courts, and state and local policymakers
as appropriate.” The Chief Counsel for Advocacy (Chief Counsel) directs the office and is
appointed by the President from civilian life with the advice and consent of the Senate.
Advocacy is a relatively small office with a relatively large mandate—to represent the interests of
small business in the regulatory process, provide Regulatory Flexibility Act (RFA) compliance
training to federal regulatory officials, produce and promote small business economic research to
inform policymakers and other stakeholders concerning the impact of federal regulatory burdens
on small businesses and the role of small businesses in the economy, and facilitate small business
outreach across the federal government.
This report examines Advocacy’s origins and the expansion of its responsibilities over time;
describes its organizational structure, funding, functions, and current activities; and discusses
recent legislative efforts to further enhance its authority. For example, during the 115th Congress,
the House passed H.R. 5, the Regulatory Accountability Act of 2017 (Title III, Small Business
Regulatory Flexibility Improvements Act), which would have expanded Advocacy’s
responsibilities. It would have revised and enhanced requirements for federal agency notification
of the Chief Counsel prior to the publication of any proposed rule; expanded the required use of
small business advocacy review panels from three federal agencies to all federal agencies,
including independent regulatory agencies; empowered the Chief Counsel to issue rules
governing federal agency compliance with the RFA; specifically authorized the Chief Counsel to
file comments on any notice of proposed rulemaking, not just when the RFA is concerned; and
transferred size standard determinations for purposes other than the Small Business Act and the
Small Business Investment Act of 1958 from the SBA’s Administrator to the Chief Counsel. The
House passed similar legislation during the 114th Congress (H.R. 527).
The analysis suggests that Advocacy faces several challenges.
 Advocacy, generally recognized as being an independent office, is housed within
the much larger SBA which, given their statutorily overlapping missions as
advocates for small businesses, makes it more difficult for stakeholders to
recognize Advocacy as the definitive voice for small businesses.
 Chief Counsels tend to have relatively short tenures, creating continuity problems
for Advocacy.
 The RFA does not define significant economic impact or substantial number of
small entities, two key terms for triggering Advocacy’s role under the RFA. The
lack of clarity concerning these key terms makes it difficult for Advocacy to
objectively determine agency compliance with the RFA and to train federal
regulatory officials in how to come into compliance with the act.
 Advocacy often finds itself involved in ideological and partisan disputes
concerning the outcome of federal regulatory policies for which it does not have
the final say.
 Advocacy’s ability to produce and promote economic research on small
businesses and to engage in outreach activities, particularly outreach activities
not directly related to its RFA role, is constrained by its relatively limited
budgetary resources.
Congressional Research Service

SBA Office of Advocacy: Overview, History, and Current Issues

Introduction
The Office of Advocacy (Advocacy) is an “independent” office within the U.S. Small Business
Administration (SBA) that is responsible for advancing “the views and concerns of small
businesses before Congress, the White House, federal agencies, the federal courts, and state and
local policymakers as appropriate.”1 The Chief Counsel for Advocacy (Chief Counsel) directs the
office and is appointed by the President from civilian life with the advice and consent of the
Senate. The Chief Counsel and Advocacy support the development and growth of American small
businesses by
 “intervening early in federal agencies’ regulatory development processes on
proposals that affect small entities and providing Regulatory Flexibility Act
compliance training to federal agency policymakers and regulatory development
officials;
 producing research to inform policymakers and other stakeholders on the impact
of federal regulatory burdens on small businesses, to document the vital role of
small businesses in the economy, and to explore and explain the wide variety of
issues of concern to the small business community; and
 fostering a two-way communication between federal agencies and the small
business community.”2
Advocacy has 52 staff members and received an appropriation of $9.466 million for FY2022.3
Advocacy’s responsibilities have expanded over time, and legislation has been introduced in
recent Congresses to increase its authority still further. For example, during the 115th Congress,
the House passed H.R. 5, the Regulatory Accountability Act of 2017 (Title III, Small Business
Regulatory Flexibility Improvements Act), by a vote of 238-183. The bill would have, among
other provisions,
 revised and enhanced requirements for federal agency notification of the Chief
Counsel prior to the publication of any proposed rule;
 expanded the required use of small business advocacy review panels from three
federal agencies to all federal agencies, including independent regulatory
agencies;
 empowered the Chief Counsel to issue rules governing federal agency
compliance with the RFA;
 specifically authorized the Chief Counsel to file comments on any notice of
proposed rulemaking, not just when the RFA is concerned; and

1 U.S. Small Business Administration (SBA), “Office of Advocacy: About Us,” at https://www.sba.gov/category/
advocacy-navigation-structure/about-us-0; and SBA, Office of Advocacy, Fiscal Year 2022 Congressional Budget
Justification and Fiscal Year 2020 Annual Performance Report, p. 174, at https://www.sba.gov/document/report-
congressional-budget-justification-annual-performance-report (hereinafter cited as SBA, FY2022 Congressional Budget
Justification and FY2020 Annual Report).
2 SBA, FY2022 Congressional Budget Justification and FY2020 Annual Report, p. 174.
3 SBA, Office of Advocacy, “Staff,” at https://advocacy.sba.gov/about/staff/; and P.L. 117-103, the Consolidated
Appropriations Act, 2022.
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 transferred size standard determinations for purposes other than the Small
Business Act and the Small Business Investment Act of 1958 from the SBA’s
Administrator to the Chief Counsel.4
During the 113th Congress, these provisions were included in H.R. 2542, the Regulatory
Flexibility Improvements Act of 2013, and were later included in H.R. 2804, the Achieving Less
Excess in Regulation and Requiring Transparency Act of 2014 (ALERRT Act of 2014), which the
House passed on February 27, 2014, and in H.R. 4, the Jobs for America Act (of 2014), which the
House passed on September 18, 2014. During the 114th Congress, these provisions were included
in H.R. 527, the Small Business Regulatory Flexibility Improvements Act of 2015, which was
passed by the House on February 5, 2015.
More recently, S. 83, the Advocacy Empowerment Act of 2019, would have empowered the Chief
Counsel to issue rules governing federal agency compliance with the RFA. Also, H.R. 6454, the
Small Business Advocacy Improvements Act of 2022, would specifically authorize the Office of
Advocacy to represent small business views and interests before foreign governments and other
international entities concerning regulatory and trade initiatives that may affect small businesses.
In addition, during the 114th Congress, S. 2847, the Prove It Act of 2016, which was reported by
the Senate Committee on Small Business and Entrepreneurship, would have authorized the Chief
Counsel to request the Office of Management and Budget’s (OMB’s) Office of Information and
Regulatory Affairs (OIRA) to review any federal agency certification that a proposed rule, if
promulgated, will not have a significant economic impact on a substantial number of small
entities and, as a result, is not required to submit a regulatory flexibility analysis of the rule. If it
is determined that the proposed rule would, if promulgated, have a significant economic impact
on a substantial number of small entities, the federal agency would then be required to perform
both an initial and a final regulatory flexibility analysis for the rule. The bill was reintroduced
during the 115th Congress (S. 2014, the Prove It Act of 2017).
This report examines Advocacy’s origins and the expansion of its responsibilities over time;
describes its organizational structure, funding, functions, and current activities; and discusses
recent legislative efforts to further enhance its authority.
Advocacy’s Origins
The Small Business Act of 1953 (P.L. 83-163, as amended) authorized the SBA and directed the
agency to “aid, counsel, assist, and protect, insofar as is possible, the interests of small-business
concerns.” The SBA provided this advocacy function primarily through its administration of
small business loan guaranty programs, contracting assistance programs, and management and
training programs. The SBA Administrator serves as the lead advocate for small businesses within
the federal government.

4 The size standard provision was in H.R. 585, the Small Business Size Standard Flexibility Act of 2011, which was
introduced during the 112th Congress. The other provisions were in H.R. 527, the Regulatory Flexibility Improvements
Act of 2011, which was introduced during the 112th Congress and passed by the House on December 1, 2011. For
additional information concerning H.R. 2542 see H.Rept. 113-288, the Regulatory Flexibility Improvements Act of
2013, Part 1. For additional information concerning the SBA’s size standards see CRS Report R40860, Small Business
Size Standards: A Historical Analysis of Contemporary Issues, by Robert Jay Dilger.
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Office of Chief Counsel for Advocacy
During the early 1970s, several small business organizations indicated at congressional hearings
that they were not wholly satisfied with the SBA’s advocacy efforts, especially in achieving
regulatory relief for small businesses. Congress responded to these concerns by approving
legislation (P.L. 93-386, the Small Business Amendments of 1974) authorizing the SBA
Administrator to create an Office of Chief Counsel for Advocacy and to appoint a Chief Counsel
for Advocacy. The Chief Counsel was to serve as a focal point for the agency’s advocacy efforts.5
P.L. 93-386 provided the Chief Counsel five duties:
1. serve as a focal point for the receipt of complaints, criticisms, and suggestions
concerning the policies and activities of the Administration and any other federal
agency that affects small businesses;
2. counsel small businesses on how to resolve questions and problems concerning
the relationship of the small business to the federal government;
3. develop proposals for changes in the policies and activities of any agency of the
federal government that will better fulfill the purposes of the Small Business Act
and communicate such proposals to the appropriate federal agencies;
4. represent the views and interests of small businesses before other federal
agencies whose policies and activities may affect small businesses; and
5. enlist the cooperation and assistance of public and private agencies, businesses,
and other organizations in disseminating information about the programs and
services provided by the federal government, which are of benefit to small
businesses, and information on how small businesses can participate in or make
use of such programs and services.6
The SBA created the Office of Chief Counsel for Advocacy in October 1974, and designated each
of the SBA’s regional, district, and branch office directors as the advocacy director for their area.7
The Office of Chief Counsel was placed under the Office of Advocacy, Planning and Research,
which was headed by an Assistant Administrator.8 Anthony Stasio, a long-time, career manager
within the SBA, was named the first Chief Counsel. Three deputy advocate positions were
subsequently created and staffed: deputy advocate for Advisory Councils, deputy advocate for
Government Relations, and deputy advocate for Small Business Organizations. The SBA’s Office
of Chief Counsel for Advocacy was fully operational as of March 1, 1975.9

5 U.S. Congress, House Select Committee on Small Business, Small Business Amendment of 1974, report to accompany
H.R. 15578, 93rd Cong., 2nd sess., July 3, 1974, H.Rept. 93-1178 (Washington: GPO, 1974), p. 8.
6 P.L. 93-386, the Small Business Amendments of 1974.
7 U.S. Congress, Senate Select Committee on Small Business, Problems Confronting Small Business, hearing on
problems confronting small business, 94th Cong., 1st sess., February 24, 1975 (Washington: GPO, 1975), p. 22.
8 U.S. Congress, Senate Select Committee on Small Business, Oversight of the Small Business Administration: The
Office of the Chief Counsel for Advocacy and How It Can Be Strengthened, hearing on the Office of the Chief Counsel
for Advocacy, 94th Cong., 2nd sess., March 29, 1976 (Washington: GPO, 1976), pp. 77-78.
9 U.S. Congress, Senate Select Committee on Small Business, Problems Confronting Small Business, hearing on
problems confronting small business, 94th Cong., 1st sess., February 24, 1975 (Washington: GPO, 1975), p. 22; and
U.S. Congress, Senate Select Committee on Small Business, Oversight of the Small Business Administration: The
Office of the Chief Counsel for Advocacy and How It Can Be Strengthened, hearing on the Office of the Chief Counsel
for Advocacy, 94th Cong., 2nd sess., March 29, 1976 (Washington: GPO, 1976), p. 2.
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An “Independent” Office of Advocacy
As the Office of Advocacy began operations, several small business organizations lobbied
Congress to provide the Chief Counsel greater independence from the SBA’s Administrator. They
argued that the SBA’s Administrator reports to the White House and is subject to the OMB
Director’s influence. In their view, OMB, at that time, was more attuned to promoting the
interests of large businesses than it was to promoting the interests of small businesses.10
Congress responded to these concerns by passing P.L. 94-305, to amend the Small Business Act
and Small Business Investment Act of 1958. Enacted on June 4, 1976, Title II of the act enhanced
the Chief Counsel’s authority by requiring the Office of Advocacy to be established as a separate,
stand-alone office within the SBA and by requiring the Chief Counsel to be appointed from
civilian life by the President, by and with the advice and consent of the Senate.11
P.L. 94-305 also
 retained Advocacy’s five duties as identified in P.L. 93-386;
 specified that one of Advocacy’s primary functions was to examine the role of
small business in the American economy and the problems faced by small
businesses and to recommend specific measures to address those problems;
 empowered the Chief Counsel, after consultation with and subject to the approval
of the SBA Administrator, to employ and fix the compensation of necessary staff,
without going through the normal competitive procedures directed by federal law
and the Office of Personnel Management;12
 specified that the Chief Counsel could obtain expert advice and other services,
and hold hearings;
 directed each federal department, agency, and instrumentality to furnish the Chief
Counsel with reports and information deemed by the Chief Counsel as necessary
to carry out his or her functions;
 ordered the Chief Counsel to provide Congress, the President, and the SBA with
information concerning his or her activities; and
 authorized to be appropriated $1 million for Advocacy, with any appropriated
funds remaining available until expended.13

10 U.S. Congress, Senate Select Committee on Small Business, Oversight of the Small Business Administration: The
Office of the Chief Counsel for Advocacy and How It Can Be Strengthened, hearing on the Oversight of the Chief
Counsel for Advocacy, 94th Cong., 2nd sess., March 29, 1976, (Washington: GPO, 1976), pp. 83, 94, 104, 109-111.
11 President Gerald Ford did not nominate a Chief Counsel for Advocacy. Mr. Stasio was named Acting Assistant
Administrator for Advocacy and Public Communication and continued to administer the Office of Advocacy until
Milton D. Stewart was confirmed as Chief Counsel in 1978. Milton D. Stewart (1978-1981) became the first of seven
Chief Counsels, to date, to be nominated by the President (nominated by President Jimmy Carter on March 2, 1978)
and confirmed by the Senate (on July 18, 1978). He was succeeded as Chief Counsel by Frank S. Swain (1981-1989,
nominated by President Ronald Reagan), Thomas P. Kerester (1992-1993, nominated by President George Bush), Jere
Walton Glover (1994-2001, nominated by President William Clinton), Thomas M. Sullivan (2002-2008, nominated by
President George W. Bush), Winslow Lorenzo Sargeant (2010 recess appointment, Senate confirmation in 2011, left in
January 2015, nominated by President Barack Obama), and Darryl L. DePriest (December 10, 2015-January 2017,
nominated by President Barack Obama).
12 U.S. Congress, Senate Committee on Small Business and Entrepreneurship, Independent Office of Advocacy Act of
2001, 107th Cong., 1st sess., March 21, 2001, S.Rept. 107-5 (Washington: GPO, 2001), p. 2.
13 U.S. Congress, Senate Select Committee on Small Business, Subcommittee on Government Regulation and Small
Business Advocacy, The Study of Small Business, hearing on The Study of Small Business, 95th Cong., 1st sess., June
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It was at this time that the word independent began to be used to describe the Chief Counsel and
the Office of Advocacy. However, Advocacy remained a part of the SBA and subject to the sitting
Administration’s influence. For example, at that time, Advocacy’s budget was provided through
the SBA’s salaries and expenses account, which was approved by the SBA Administrator;
Advocacy’s annual staffing allotment was subject to the SBA Administrator’s approval; and some
senior staff within Advocacy were vetted by the White House personnel office prior to hiring.14
Advocacy’s Regulatory Oversight Role Expanded
Advocacy’s duties were further expanded following enactment of P.L. 96-354, the Regulatory
Flexibility Act of 1980 (RFA, as amended).15 The RFA
establishes in law the principle that government agencies must analyze the effects of their
regulatory actions on small entities−small businesses, small nonprofits, and small
governments−and consider alternatives that would be effective in achieving their
regulatory objectives without unduly burdening these small entities. Advocacy has the
responsibility of overseeing and facilitating federal agency compliance.16
The RFA’s sponsors argued that federal agencies should be required to examine the impact of
regulations on small businesses because federal regulations tend to be “uniform in design, permit
little discretion in their implementation, and place a disproportionate burden upon small
businesses, small organizations and small governmental bodies.”17 As Alfred Dougherty Jr.,
director of the Federal Trade Commission’s Bureau of Competition, testified at a congressional
hearing:
First, even if actual regulatory costs are equal between competing large and small firms,
small firms have fewer units of output over which to spread such costs and must include in
the price of each unit a larger component of regulatory cost. Second, where small firms
have smaller actual regulatory costs than large firms (as is generally the case), small firms
remain at a competitive disadvantage because they are unable to take advantage of the
“economies of scale” of regulatory compliance. Large firms generally already have
extensive “in-house” data compilation and reporting systems and specialized staff
accountants, lawyers and managers whose primary function is regulatory compliance.
Small firms, by comparison, must either hire additional personnel or purchase expensive
consulting services in order to acquire the necessary regulatory expertise.18
Economist Milton Kafoglis, a member of the President Jimmy Carter’s Council on Wage and
Price Stability, testified that

29, 1977 (Washington: GPO, 1977), pp. 12-13.
14 P.L. 94-305; and U.S. Congress, Senate Committee on Small Business and Entrepreneurship, Independent Office of
Advocacy Act of 2001, 107th Cong., 1st sess., March 21, 2001, S.Rept. 107-5 (Washington: GPO, 2001), pp. 2-4.
15 5 U.S.C. §601 et seq. Also see P.L. 104-121, the Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA); P.L. 111-203, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; P.L. 111-240,
the Small Business Jobs Act of 2010; and Executive Order 13272. For further information concerning the RFA, see
CRS Report RL34355, The Regulatory Flexibility Act: Implementation Issues and Proposed Reforms, coordinated by
Maeve P. Carey.
16 SBA, Office of Advocacy, Report on the Regulatory Flexibility Act FY2013, p. 1, at http://www.sba.gov/sites/
default/files/13regflx.pdf.
17 U.S. Congress, Senate Committee on the Judiciary, The Regulatory Flexibility Act, report to accompany S. 299, 96th
Cong., 2nd sess., July 30, 1980, S.Rept. 96-878 (Washington: GPO, 1980), p. 3.
18 U.S. Congress, Senate Committee on the Judiciary, The Regulatory Flexibility Act, report to accompany S. 299, 96th
Cong., 2nd sess., July 30, 1980, S.Rept. 96-878 (Washington: GPO, 1980), p. 4.
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There seem to be clear economies of scale imposed by most regulatory endeavors. Uniform
application of regulatory requirements thus seems to increase the size [of the] firm that can
effectively compete. The cost curve of the firm is shifted upward … [with] the small firms’
cost curve shifting more than that of the dominant firms [thus] the share of the dominant
firm will increase while that of small firms will decrease. As a result, industrial
concentration will have increased. This … suggests that the “small business” [regulatory]
problem goes beyond mere sympathy for the small businessman, but strikes at the heart of
the established national policy of maintaining competition and mitigating monopoly.19
As discussed below, the RFA requires federal agencies to assess the impact of their forthcoming
regulations on small entities, which the act defines as small businesses, small governmental
jurisdictions, and certain small not-for-profit organizations.20 The Chief Counsel is responsible for
monitoring and reporting agencies’ compliance with the act’s provisions. The Chief Counsel also
reviews and comments on proposed regulations and may appear as amicus curiae (i.e., friend of
the court) in any court action to review a rule.
Advocacy’s Independent Status Enhanced
P.L. 111-240, the Small Business Jobs Act of 2010, further enhanced Advocacy’s independence
by ending the practice of including Advocacy’s budget in the SBA’s Salaries and Expenses’
Executive Direction account. Instead, the President is required to provide a separate statement of
the amount of appropriations requested for Advocacy, “which shall be designated in a separate
account in the General Fund of the Treasury.” The Small Business Jobs Act also requires the SBA
Administrator to provide Advocacy with “appropriate and adequate office space at central and
field office locations, together with such equipment, operating budget, and communications
facilities and services as may be necessary, and shall provide necessary maintenance services for
such offices and the equipment and facilities located in such offices.”
In recognition of its enhanced independence and separate appropriations account, Advocacy, for
the first time, issued its own congressional budget justification document and annual performance
report as part of the Obama Administration’s FY2013 budget request. That document was
presented in a new appendix accompanying the SBA’s congressional budget justification

19 U.S. Congress, Senate Committee on the Judiciary, The Regulatory Flexibility Act, report to accompany S. 299, 96th
Cong., 2nd sess., July 30, 1980, S.Rept. 96-878 (Washington: GPO, 1980), pp. 3-4. Also see U.S. Congress, Senate
Committee on the Judiciary, The Regulatory Flexibility Act, report to accompany S. 1974, 95th Cong., 2nd sess., October
11, 1978, S.Rept. 95-1322 (Washington: GPO, 1978), pp. 3-10.
20 The RFA specifies that …(3) the term small business has the same meaning as the term small business concern under
Section 3 of the Small Business Act, unless an agency, after consultation with the Office of Advocacy of the Small
Business Administration and after opportunity for public comment, establishes one or more definitions of such term,
which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register; (4) the
term small organization means any not-for-profit enterprise, which is independently owned and operated and is not
dominant in its field, unless an agency establishes, after opportunity for public comment, one or more definitions of
such term, which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register;
(5) the term small governmental jurisdiction means governments of cities, counties, towns, townships, villages, school
districts, or special districts, with a population of less than fifty thousand, unless an agency establishes, after
opportunity for public comment, one or more definitions of such term which are appropriate to the activities of the
agency and which are based on such factors as location in rural or sparsely populated areas or limited revenues due to
the population of such jurisdiction, and publishes such definition(s) in the Federal Register; (6) the term small entity
shall have the same meaning as the terms small business, small organization and small governmental jurisdiction
defined in paragraphs (3), (4), and (5) of this section. See 5 U.S.C. §601 (3)-(6).
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document and annual performance report. Advocacy has continued to issue its own budget
justification document in each of the Administration’s subsequent budget requests.21
Current Organizational Structure and Funding
As mentioned previously, Advocacy currently has 52 staff positions (typically with three to six
vacancies at any given time): 5, including the Chief Counsel (currently vacant), in the Office of
the Chief Counsel; 16 in the Office of Interagency Affairs (regulatory staff); 8 in the Office of
Economic Research; 6 in the Office of Information; 11 in the Office of Regional Affairs (regional
advocates); and 6 in the Administrative Support Branch. The Office of Advocacy’s organizational
chart is presented below, with its anticipated staffing level.
Figure 1. SBA Office of Advocacy Organizational Chart
(anticipated staffing level, FY2022)

Source: U.S. Small Business Administration, Office of Advocacy, “Office of Advocacy Staff,” at
https://www.sba.gov/advocacy/office-advocacy-staff.
As mentioned, Advocacy received an appropriation of $9.466 million for FY2022. Staff salaries
and benefits account for about 95% of Advocacy’s budget, with the remainder used for economic
research grants and direct expenses, such as subscriptions, travel, training, and office supplies.22
The Biden Administration has requested $10.211 million for Advocacy in FY2023, which would
allow Advocacy to increase its staff to 55 full-time equivalent positions.23

21 The Office of Advocacy’s congressional budget documents can be accessed on the SBA’s website at
https://www.sba.gov/document/report-congressional-budget-justification-annual-performance-report.
22 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
151.
23 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
151.
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Advocacy and Federal Regulations
Advocacy is responsible for monitoring and reporting on federal agency compliance with the
RFA (5 U.S.C. §§601-612) and Executive Order 13272, Proper Consideration of Small Entities in
Agency Rulemaking (August 13, 2002). Advocacy also comments on proposed rules and
participates in small business advocacy review panels, among other activities.
The RFA
As mentioned previously, the RFA (as amended) requires federal agencies to assess the impact of
their forthcoming regulations on small entities, which the act defines as including small
businesses, small governmental jurisdictions, and certain small not-for-profit organizations.
According to Advocacy, the RFA
does not seek preferential treatment for small entities, require agencies to adopt regulations
that impose the least burden on small entities, or mandate exemptions for small entities.
Rather, it requires agencies to examine public policy issues using an analytical process that
identifies, among other things, barriers to small business competitiveness and seeks a level
playing field for small entities, not an unfair advantage.24
Under the RFA, Cabinet departments and independent agencies as well as independent regulatory
agencies must prepare a regulatory flexibility analysis at the time certain proposed and final rules
are issued.25 The analysis must describe, among other things, (1) the reasons why the regulatory
action is being considered; (2) the small entities to which the proposed rule will apply and, where
feasible, an estimate of their number; (3) the projected reporting, recordkeeping, and other
compliance requirements of the proposed rule; and (4) any significant alternatives to the rule that
would accomplish the statutory objectives while minimizing the impact on small entities.26
However, these analytical requirements are not triggered if the head of the issuing agency
certifies that the proposed rule would not have a “significant economic impact on a substantial
number of small entities.” The RFA does not define significant economic impact or substantial
number of small entities. As a result, federal agencies have substantial discretion regarding when
the act’s analytical requirements are initiated. In addition, the RFA’s analytical requirements do
not apply to final rules for which the agency does not publish a proposed rule.27
The RFA also requires federal agencies to
 publish a “regulatory flexibility agenda” each April and October in the Federal
Register, listing regulations that the agency expects to propose or promulgate
which are likely to have a significant economic impact on a substantial number
of small entities;
 provide their regulatory flexibility agenda to the Chief Counsel and to small
businesses or their representatives;

24 SBA, Office of Advocacy, “A Guide for Government Agencies: How to Comply with the Regulatory Flexibility
Act,” May 2012, p. 1, at https://www.sba.gov/sites/default/files/rfaguide_0512_0.pdf.
25 The analysis for a proposed rule is referred to as an initial regulatory flexibility analysis (IRFA) and the analysis for
a final rule is referred to as a final regulatory flexibility analysis (FRFA).
26 See CRS Report RL34355, The Regulatory Flexibility Act: Implementation Issues and Proposed Reforms,
coordinated by Maeve P. Carey.
27 CRS Report RL34355, The Regulatory Flexibility Act: Implementation Issues and Proposed Reforms, coordinated by
Maeve P. Carey.
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 retrospectively review rules that have or will have a significant impact within 10
years of their promulgation to determine whether they should be continued
without change or should be amended or rescinded to minimize their impact on
small entities; and
 ensure that small entities have an opportunity to participate in the rulemaking
process.28
In addition, the Environmental Protection Agency (EPA), Occupational Safety and Health
Administration (OSHA), and the Consumer Financial Protection Bureau (CFPB) are required to
convene a small business advocacy review panel (sometimes referred to as SBREFA panels)29
whenever they are developing a rule that is anticipated to have a significant economic impact on a
substantial number of small entities. These panels consist of a representative or representatives
from the rulemaking agency, OMB’s Office of Information and Regulatory Affairs (OIRA), and
the Chief Counsel. Information and advice from small entity representatives are solicited to assist
the panel in understanding the ramifications of the proposed rule. The panel must be convened
and complete its report, with recommendations, within a 60-day period.30 Finally, the RFA
encourages the issuing agency to modify the proposed rule or initial regulatory flexibility analysis
as appropriate, based on the information received from the panel.
The RFA also requires the Chief Counsel to monitor and report at least annually on agencies’
compliance with the act. The Chief Counsel accomplishes this primarily by reviewing and
commenting on proposed regulations and by participating in small business advocacy review
panels. In addition, the Chief Counsel may appear as amicus curiae (i.e., friend of the court) in
any court action to review a rule.
Executive Order 13272
Executive Order 13272, Proper Consideration of Small Entities in Agency Rulemaking (August
13, 2002), requires federal agencies to make information publicly available concerning how they
will comply with the RFA’s statutory mandates.31 It also requires federal agencies to send to
Advocacy copies of any draft regulations that may have an impact on a substantial number of
small entities. Agencies must send these draft regulations to Advocacy at the same time the draft
rules are sent to OIRA for review, or at a reasonable time prior to their publication in the Federal
Register. Agencies must consider Advocacy’s comments on the proposed rule and must address
these comments in the final rule published in the Federal Register.32

28 SBA, Office of Advocacy, “Report on the Regulatory Flexibility Act, FY2014,” January 2015, pp. 19-21, at
https://www.sba.gov/sites/default/files/advocacy/FY2014%20RFA%20Report.pdf.
29 Small business advocacy review panels were created by P.L. 104-121, the Contract with America Advancement Act
of 1996; Title III, the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). That act requires the
Environmental Protection Agency and Occupational Safety and Health Administration to convene small business
advocacy review panels. P.L. 111-203, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,
added the Consumer Financial Protection Bureau.
30 The agency proposing the rule normally fixes the convening date after consulting with Advocacy and OMB’s Office
of Information and Regulatory Affairs. The three agencies typically work together before convening to discuss
regulatory alternatives. See SBA, Office of Advocacy, “A Guide for Government Agencies: How to Comply with the
Regulatory Flexibility Act,” May 2012, p. 52, at http://www.sba.gov/sites/default/files/rfaguide_0512_0.pdf.
31 Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 Federal Register
53461-53462, August 13, 2002.
32 SBA, Office of Advocacy, “Report on the Regulatory Flexibility Act, FY2016,” January 2017, p. 11, at
https://www.sba.gov/sites/default/files/advocacy/2016_RFA_Annual_Report.pdf (hereinafter cited as SBA,
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Executive Order 13272 requires Advocacy to
 notify federal agencies concerning how to comply with the RFA, which is
accomplished primarily through Advocacy’s periodic publication of A Guide for
Government Agencies: How to Comply with the Regulatory Flexibility Act and
through Advocacy’s compliance training program;
 report annually on federal agency compliance with the executive order, which is
accomplished primarily through Advocacy’s annual publication of Report on the
Regulatory Flexibility Act; and
 train federal regulatory agencies in how to comply with the RFA, which is
accomplished through Advocacy’s compliance training program.33
Advocacy’s Regulatory Activities
Advocacy provided 17 official public comment letters to 10 federal agencies on a variety of
proposed rules in FY2021.34 It also hosted 20 roundtable discussions on various topics, including
proposed rules and regulatory issues.35 These roundtable discussions provided stakeholders an
opportunity to share their views concerning the impact of proposed rules. Advocacy also provided
training on RFA compliance to 290 federal officials.36
Each year, Advocacy provides an estimate of the regulatory cost savings its activities provide to
small businesses in the form “of foregone capital or annual compliance costs that otherwise
would have been required in the first year of a rule’s implementation.”37 These estimates are
based primarily on estimates from the federal agencies promulgating the rules, and, in some
instances, from industry estimates.
Estimating the costs and benefits of federal regulations is methodologically challenging.38 For
example, researchers must determine the baseline for measurement (i.e., what effects would have
occurred in the absence of the regulation) and many regulatory cost estimates are based on
aggregating the results of regulatory studies conducted years earlier. These studies often use
different methods and vary in quality, making conclusions drawn from them problematic. Some
observers, including OMB, doubt whether an accurate measure of total regulatory costs and
benefits is possible. Moreover, in the case of Advocacy, estimating regulatory cost savings from
its activities is even more challenging because it is nearly impossible to determine what changes

“Regulatory Flexibility Act Report, FY2016”).
33 SBA, “Regulatory Flexibility Act Report, FY2016,” p. 15.
34 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
156. Advocacy provided 28 official public comment letters to federal agencies on a variety of proposed rules in
FY2013, 22 in FY2014, 20 in FY2015, 20 in FY2016, 24 in FY2017, 17 in FY2018, 22 in FY2019, and 19 in FY2020.
35 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
156. Advocacy hosted 21 roundtable discussions in FY2013, 19 in FY2014, 21 in FY2015, 25 in FY2016 and FY2017,
23 in FY2018, 17 in FY2019, and 11 in FY2020.
36 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
156. Advocacy provided training on RFA compliance to 157 federal officials at rule-writing agencies in FY2016, 195
in FY2017, 132 in FY2018, 113 in FY2019, and 124 in FY2020.
37 SBA, Office of Advocacy, “Report on the Regulatory Flexibility Act, FY2013,” February 2014, p. 33, at
https://www.sba.gov/sites/default/files/13regflx.pdf.
38 For further information and analysis concerning the methodological challenges in estimating the costs and benefits of
federal regulation see out-of-print CRS Report R41763, Analysis of an Estimate of the Total Costs of Federal
Regulations, available to congressional clients upon request.
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to these regulations would have been made during the review and comment period if Advocacy
did not exist.
Advocacy reported that its intervention in rules that were made final resulted in first-year
regulatory cost savings on behalf of small businesses of $3.277 billion in FY2021.39
Producing and Promoting Research on
Small Businesses
Advocacy’s Office of Economic Research “assembles and uses data and other information from
many different sources to develop data products that are as timely and actionable as possible.”40
These products typically relate to the role that small businesses “play in the economy, including
the availability of credit, the effects of regulations and taxation, the role of firms owned by
women, minority and veteran entrepreneurs, innovation, and factors that encourage or inhibit
small business start-up, development and growth.”41
In addition to sponsoring and conducting research on small business, Advocacy maintains web
pages with links to
 state economic profiles, which are compiled annually by Office of Advocacy
staff and provide information concerning small businesses in the state, such as
number of small businesses in the state, the number of people employed by those
small businesses in the state, and various demographic information concerning
the small business owners in the state;42
 firm size economic data, which are compiled by Advocacy staff from the U.S.
Bureau of the Census and the U.S. Bureau of Labor Statistics and provide
information concerning various owner and business characteristics, such as the
number of firms, number of establishments, employment, and annual payroll by
the employment size of the business and by location and industry;43
 quarterly economic bulletins, which are authored by Advocacy staff to examine
trends in small business employment and lending;44
 research projects which have been authored by Office of Advocacy staff, either
by choice or by congressional mandate, and by others sponsored by Advocacy;45

39 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
156. The Office of Advocacy reported that its intervention in rules that were made final resulted in regulatory cost
savings on behalf of small businesses of more than $1.6 billion in FY2015, $1.4 billion in FY2016, $1.151 billion in
FY2017, $255.3 million in FY2018, $773 million in FY2019, and $2.259 billion in FY2020.
40 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
160.
41 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
160.
42 SBA, Office of Advocacy, “State Economic Profiles,” at https://www.sba.gov/category/advocacy-navigation-
structure/research-and-statistics/state-economic-profiles.
43 SBA, Office of Advocacy, “Firm Size Data,” at https://www.sba.gov/advocacy/firm-size-data.
44 SBA, Office of Advocacy, “Quarterly Bulletins,” at https://www.sba.gov/category/advocacy-navigation-structure/
research-and-statistics/quarterly-indicators.
45 SBA, Office of Advocacy, “Research Reports,” at https://advocacy.sba.gov/category/reports/.
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 fact sheets, which are authored by Office of Advocacy staff, covering various
topics, such as gender differences in financing, the availability of health
insurance among small businesses, and credit card financing;46
 issue briefs, which are authored by Advocacy staff, covering various topics, such
as veteran business owners and access to capital for women- and minority-owned
businesses;47 and
 major sources of data collected by the federal government concerning small
business.48
Advocacy also provides funding to the Census Bureau to support the generation of business data
by firm size; publishes “The Small Business Advocate,” a newsletter summarizing Advocacy’s
research endeavors, which has more than 41,000 online subscribers; and publishes “The Small
Business Economy,” an annual report on the status of small businesses and their role in the
national economy.49
Advocacy’s Research Activities
Advocacy published 23 contract and internal research and data products in FY2021.50 These
reports covered a variety of issues, including small business lending during the COVID-19
pandemic, the effects of COVID-19 on small businesses, and updates of fact sheets and reports
such as Small Business Profiles for the Congressional Districts.51
In addition, Advocacy’s economic research staff sponsored two “Small Business Economic
Research Forums.” These forums provide economists and researchers an opportunity “to discuss
a key economic topic” and help “to keep Advocacy’s staff up-to-date on the latest data and
research from other agencies and researchers.”52
Promoting Small Business Outreach
As mentioned, Advocacy engages in outreach activities related to its role with the RFA. For
example, Advocacy participated in seven small business advocacy review panels in FY2016 (one
with OSHA, two with the CFPB, and four with the EPA), one panel in FY2018 (with OSHA),
none in FY2019, two in FY2020 (one with OSHA and one with CFPB), and six in FY2021 (one

46 SBA, Office of Advocacy, “Small Business Facts,” at https://advocacy.sba.gov/?s=small+business+facts.
47 SBA, Office of Advocacy, “Issue Briefs,” at https://advocacy.sba.gov/?s=issue+briefs.
48 SBA, Office of Advocacy, “Small Business Data Resources: U.S. Federal Government,” at https://www.sba.gov/
sites/default/files/Small%20Business%20Data%20Resources%202013.pdf.
49 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
161; and SBA, Office of Advocacy, “Advocacy Newsletter,” at https://advocacy.sba.gov/category/news-articles/news/
newsletter/.
50 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
162. The Office of Advocacy published 26 contract and internal research reports in FY2015, 26 in FY2016, 20 in
FY2017, FY2018, and FY2019, and 21 in FY2020.
51 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, pp.
162-163.
52 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
163. The Office of Advocacy sponsored 8 Small Business Economic Research Forums in FY2015, 10 in FY2016, 6 in
FY2017 and FY2018, 5 in FY2019, and 4 in FY2020.
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with OSHA, one with the CFPB, and four with the EPA).53 In each case, Advocacy provided
outreach to small business owners interested in sharing their views concerning the agency’s
proposed rule.
Advocacy also regularly sponsors roundtable discussions, conferences, and symposia to provide
small business owners an opportunity to share their views on issues of concerns to them. For
example, Advocacy’s regional advocates regularly “interact directly with small businesses, small
business trade associations, governors and state legislatures to educate them about the benefits of
regulatory flexibility and testify at state-level legislation hearings on small business issues when
requested to do so.”54 Regional advocates also “work closely with the ten Regional Fairness
Boards in their respective regions to develop information for the SBA’s National Ombudsman, as
provided for by the Small Business Regulatory Enforcement Fairness Act and alert businesses in
their respective regions about regulatory proposals that could affect them.”55
The Chief Counsel also meets regularly with business organizations and trade associations, and
participates in Advocacy roundtable discussions, conferences, and symposia. Advocacy’s
economists provide economic presentations at academic conferences, trade association meetings,
think tank events, and other government-sponsored events.56
Advocacy’s Outreach Activities
Advocacy’s regional advocates participated in 552 outreach events in FY2020.57 Because all of
Advocacy’s regional advocate positions were vacant subsequent to the transition in

53 SBA, Office of Advocacy, “Report on the Regulatory Flexibility Act, FY2016,” January 2017, p. 17, at
https://www.sba.gov/sites/default/files/advocacy/2016_RFA_Annual_Report.pdf; SBA, Office of Advocacy, Fiscal
Year 2020 Congressional Budget Justification and Fiscal Year 2018 Annual Performance Report, p. 188, at
https://www.sba.gov/document/report-congressional-budget-justification-annual-performance-report; SBA, FY2021
Congressional Budget Justification and FY2019 Annual Report, p. 208, at https://www.sba.gov/document/report-
congressional-budget-justification-annual-performance-report; SBA, FY2022 Congressional Budget Justification and
FY2020 Annual Report, p. 182; and SBA, Office of Advocacy, “SBREFA Panels,” at
https://advocacy.sba.gov/resources/reference-library/sbrefa/.
54 SBA, Office of Advocacy, Fiscal Year 2015 Congressional Budget Justification and Fiscal Year 2013 Annual
Performance Report, p. 12, at http://www.sba.gov/sites/default/files/files/advocacy_CBJ_fy15.PDF (hereinafter cited
as SBA, FY2015 Congressional Budget Justification and FY2013 Annual Report).
55 SBA, FY2015 Congressional Budget Justification and FY2013Annual Report, p. 12. Congress established the Small
Business and Agriculture Regulatory Enforcement Ombudsman position and the ten Regional Fairness Boards in P.L.
104-121, the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). The Ombudsman reports
directly to the SBA Administrator and ensures that small businesses subject to an enforcement activity by a federal
regulatory agency are provided a means to comment on the enforcement activity and to have comments forwarded to
the Inspector General of the affected agency in appropriate circumstances. The Ombudsman reports annually to
Congress and affected agencies evaluating the enforcement activities of agency personnel, including a rating of the
responsiveness to small business of the various regional and program offices of each agency. The Ombudsman also
coordinates and reports annually on the activities, findings, and recommendations of the ten Regional Fairness Boards.
Each Regional Fairness Board meets at least annually to advise the Ombudsman on matters of concern to small
businesses relating to federal regulatory enforcement activities. Each Board has five members, who are owners,
operators, or officers of small businesses. They are appointed by the SBA Administrator after receiving
recommendations from the chair and ranking members of the House and Senate Committees on Small Business. Board
members serve at the pleasure of the SBA Administrator for terms of three years or less.
56 SBA, Office of Advocacy, Fiscal Year 2019 Congressional Budget Justification and Fiscal Year 2017 Annual
Performance Report, p. 4, at https://www.sba.gov/sites/default/files/aboutsbaarticle/
FY_2019_CBJ_Office_of_Advocacy.pdf.
57 SBA, FY2022 Congressional Budget Justification and FY2020 Annual Report, p. 188. The Office of Advocacy’s
regional advocates participated in 607 outreach events in FY2013, 536 in FY2014, 550 in FY2015, 509 in FY2016, 141
in FY2017, 523 in FY2018, and 852 in FY2019. The Office of Advocacy’s regional advocates participated in fewer
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administrations on January 20, 2021, no qualifying outreach events for Advocacy’s regional
advocates were recorded in FY2021. Advocacy economists made 25 presentations to academic,
media, or policy audiences, and participated in regulatory compliance training at regulatory
agencies in FY2021.58
Current Congressional Issues
As has been discussed, Advocacy’s responsibilities have expanded over time. During the 115th
Congress, the House passed H.R. 5, the Regulatory Accountability Act of 2017 (Title III, Small
Business Regulatory Flexibility Improvements Act), which would have increased Advocacy’s
authority still further. Specifically, H.R. 5 would have
 revised and enhanced requirements for federal agency notification of the Chief
Counsel prior to the publication of any proposed rule;
 expanded the required use of small business advocacy review panels from three
federal agencies to all federal agencies, including independent regulatory
agencies;
 empowered the Chief Counsel to issue rules governing federal agency
compliance with the RFA;
 specifically authorized the Chief Counsel to file comments on any notice of
proposed rulemaking, not just when the RFA is concerned; and
 transferred size standard determinations for purposes other than the Small
Business Act and the Small Business Investment Act of 1958 from the SBA’s
Administrator to the Chief Counsel.
In the 116th Congress, the House also passed H.R. 128, the Small Business Advocacy
Improvements Act of 2019, on January 8, 2019, by voice vote. The bill would have expanded the
list of Advocacy’s primary functions and duties by specifying that Advocacy shall (1) examine
the role of small businesses in the international economy and (2) represent the views and interests
of small businesses before foreign governments and international entities to contribute to
regulatory and trade initiatives that may affect small businesses.
In addition, S. 83, the Advocacy Empowerment Act of 2019, would, among other provisions,
have authorized Advocacy to issue, modify, or amend rules governing federal agency compliance
with the RFA.59 Also, as mentioned, H.R. 6454, the Small Business Advocacy Improvements Act
of 2022, would specifically authorize the Office of Advocacy to represent small business views
and interests before foreign governments and other international entities concerning regulatory
and trade initiatives that may affect small businesses.

outreach events in FY2017 than in previous years because they are reappointed with each new Administration and all
positions became vacant in January 2017. Although some regional advocates were reappointed during FY2017, others
were not. A full team was not in place by the end of the year.
58 SBA, Office of Advocacy, FY2023 Congressional Budget Justification and FY2021 Annual Performance Report, p.
163.
59 See U.S. Congress, Senate Committee on Small Business and Entrepreneurship and the Subcommittee on Regulatory
Affairs and Federal Management, Committee on Homeland Security and Governmental Affairs, Reauthorization of the
SBA Office of Advocacy, joint hearing, 116th Cong., 1st sess., May 22, 2019, S. Hrg. 116-86 (Washington: GPO, 2019),
p. 97.
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Arguments for Expanding Advocacy’s Regulatory Authority
Advocates of expanding Advocacy’s authority and role under the RFA argue that legislation is
necessary to “close loopholes [in the RFA] and more effectively reduce the disproportionate
burden that over-regulation places on small entities, thereby enhancing job creation and hastening
economic recovery.”60 They argue that
recent regulatory expansions and the future threat of further excessive federal regulation—
such as under the waves of regulation occurring to implement the Patient Protection and
Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection
Act—have created immense regulatory burdens and uncertainty for the economy, chilling
job creation, investment and economic growth and suppressing America’s economic
freedom and standing among the world’s economies. These effects are particularly
burdensome on small businesses—and since start-up firms are the source of net job creation
in the U.S. economy it is only logical that the impact of these effects on small businesses
contributes substantially to the economy’s inability to create sufficient levels of new jobs.61
Advocates of expanding the Office of Advocacy’s authority also note that the Government
Accountability Office (GAO) has found that the lack of a uniform definition for the terms
significant economic impact, and substantial number of small entities contributes to inconsistent
compliance with the RFA across federal agencies. They argue that GAO’s findings are further
evidence that the RFA needs to be amended.62
Arguments Against Expanding Advocacy’s Regulatory Authority
Opponents of expanding Advocacy’s authority and role under the RFA argue that the provisions
being advocated are part of an “ongoing attack on federal regulation,” presented under the guise
of “pro-small business rhetoric, which will erect significant barriers to rulemaking that will hinder
the promulgation of critical public health and safety protections.”63 They argue that these
provisions are

60 U.S. Congress, House Committee on the Judiciary, Regulatory Flexibility Improvements Act of 2013, report to
accompany H.R. 2542, 113th Cong., 1st sess., December 11, 2013, H.Rept. 113-288, Part 1 (Washington: GPO, 2013),
p. 2.
61 U.S. Congress, House Committee on the Judiciary, Regulatory Flexibility Improvements Act of 2013, report to
accompany H.R. 2542, 113th Cong., 1st sess., December 11, 2013, H.Rept. 113-288, Part 1 (Washington: GPO, 2013),
pp. 7-8; and U.S. Congress, House Committee on the Judiciary, Small Business Regulatory Flexibility Improvements
Act of 2015, report to accompany H.R. 527, 114th Cong., 1st sess., February 2, 2015, H.Rept. 114-12, Part 1
(Washington: GPO, 2015), p. 8.
62 U.S. Congress, House Committee on the Judiciary, Regulatory Flexibility Improvements Act of 2013, report to
accompany H.R. 2542, 113th Cong., 1st sess., December 11, 2013, H.Rept. 113-288, Part 1 (Washington: GPO, 2013),
p. 3; and U.S. Congress, House Committee on the Judiciary, Small Business Regulatory Flexibility Improvements Act of
2015, report to accompany H.R. 527, 114th Cong., 1st sess., February 2, 2015, H.Rept. 114-12, Part 1 (Washington:
GPO, 2015), p. 3. See U.S. General Accounting (now Accountability) Office, Regulatory Flexibility Act: Key Terms
Still Need to Be Clarified, GAO-01-669T, April 24, 2001, pp. 1-2, at http://www.gao.gov/assets/110/108793.pdf; U.S.
General Accounting (now Accountability) Office, Regulatory Flexibility Act: Clarification of Key Terms Still Needed,
GAO-02-491T, March 6, 2002, pp. 3-4, at http://www.gao.gov/assets/110/109134.pdf; U.S. General Accounting (now
Accountability) Office, Regulatory Reform: Prior Reviews of Federal Regulatory Process Initiatives Revel
Opportunities for Improvements, GAO-05-939T, July 27, 2005, pp. 5-7, at http://www.gao.gov/assets/120/112084.pdf;
and U.S. General Accounting (now Accountability) Office, Regulatory Flexibility Act: Congress Should Revisit and
Clarify Elements of the Act to Improve Its Effectiveness, GAO-06-998T, July 20, 2006, pp. 1, 4-10, at
http://www.gao.gov/assets/120/114481.pdf.
63 U.S. Congress, House Committee on the Judiciary, Regulatory Flexibility Improvements Act of 2013, report to
accompany H.R. 2542, 113th Cong., 1st sess., December 11, 2013, H.Rept. 113-288, Part 1 (Washington: GPO, 2013),
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(1) based on the false premise that regulatory costs stifle economic growth and job creation;
(2) threatens public health and safety by severely undermining federal agency rulemaking;
(3) imposes additional duties on agencies while failing to provide for any additional
resources to meet such burdens, and (4) allows more opportunities for industry to delay or
defeat proposed rulemakings.64
Opponents also argue that these provisions
do nothing to alleviate the purported burden on small entities of complying with federal
regulations. In fact, it includes no provision that offers assistance to small entities, whether
through subsidies, government guaranteed loans, preferential tax treatment for small firms,
or fully funded compliance assistance offices. Instead, the bill merely aggrandizes the
power of the SBA’s Office of Advocacy and of the professional lobbying class in
Washington.65
Concluding Observations
The SBA’s Office of Advocacy is a relatively small office with a relatively large mandate—to
represent the interests of small business in the regulatory process, produce and promote small
business economic research, and facilitate small business outreach across the federal government.
It faces several challenges.
First, Advocacy is generally recognized as being an independent office, but it is housed within the
SBA and remains subject to its influence through (1) its proximity to the agency and its
organizational culture; (2) the budgetary process, which provides the SBA Administrator a role,
albeit recently reduced, in determining Advocacy’s budget; and (3) the sheer size of the SBA
(over 5,000 full-time equivalent (FTE) employees and a FY2021 budget of over $2 billion)
relative to Advocacy which, given their statutorily overlapping missions as advocates for small
businesses, makes it more difficult than would otherwise be the case for stakeholders to recognize
Advocacy as the definitive voice for small businesses.
Second, Chief Counsels tend to have relatively short tenures (three years, eight years, one year,
seven years, six years, four years, and one year). When they leave office, there have often been
delays in naming a successor, creating continuity problems for Advocacy. For example, the
position was filled on an interim basis by Claudia Rodgers, a long-time Advocacy senior staff
member, from January 2015 (following Winslow Sargeant’s departure) until Darryl L. DePriest’s
Senate confirmation on December 10, 2015. DePriest left office in January 2017. Major L. Clark,
III, previously Assistant Chief Counsel for Procurement Policy for Advocacy, is currently filling
the Chief Counsel’s position on an interim basis.66 Chief Counsels leave office for various
reasons, such as a change in Administration or for more lucrative positions in the private sector.

p. 58.
64 U.S. Congress, House Committee on the Judiciary, Small Business Regulatory Flexibility Improvements Act of 2015,
report to accompany H.R. 527, 114th Cong., 1st sess., February 2, 2015, H.Rept. 114-12, Part 1 (Washington: GPO,
2015), p. 57.
65 U.S. Congress, House Committee on the Judiciary, Small Business Regulatory Flexibility Improvements Act of 2015,
report to accompany H.R. 527, 114th Cong., 1st sess., February 2, 2015, H.Rept. 114-12, Part 1 (Washington: GPO,
2015), pp. 74, 75.
66 President Trump nominated David C. Tryon to be the next Chief Counsel on September 29, 2017. The Senate
Committee on Small Business and Entrepreneurship held a hearing on his nomination on February 14, 2018. The
hearing can be viewed at https://www.sbc.senate.gov/public/index.cfm/hearings?ID=C476277C-BE34-4FA6-B8D8-
D445AB2EE120.
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Third, one of Advocacy’s primary functions is to monitor and report on federal agency
compliance with the RFA, provide comments on proposed rules, and train federal regulatory
officials to assist them in complying with the RFA’s provisions. However, as GAO has noted, the
RFA does not define significant economic impact or substantial number of small entities, two key
terms for triggering Advocacy’s role under the RFA. The lack of clarity concerning these key
terms makes it difficult for Advocacy to objectively determine agency compliance with the RFA
and also makes it more difficult for Advocacy to train federal regulatory officials in how to come
into compliance with the act. GAO and others have recommended that Congress clarify the
meaning of these terms. However, the RFA’s original authors purposely decided not to provide a
precise definition for these terms. They argued that the varying missions and constituencies
served by federal agencies necessitated the provision of discretion to allow federal agencies to
“determine what is significant to their programs and particular constituencies.”67
Fourth, Advocacy is subject to criticism from those who believe that it should be more aggressive
in preventing federal regulations (i.e., from those who generally oppose federal regulations,
especially regulations related to environmental issues and health care reform) and from those who
believe that it should be less aggressive in this regard (i.e., from those who generally view federal
regulations favorably, especially in addressing environmental and workplace safety issues).68
Thus, Advocacy often finds itself involved in ideological and partisan disputes concerning the
outcome of federal regulatory policies for which it does not have the final say.
Finally, Advocacy’s relatively limited budget restricts its ability to produce and promote
economic research on small businesses and to engage in outreach activities, particularly outreach
activities not directly related to its RFA role. It could be argued that Advocacy does not need
additional resources for these endeavors because the SBA engages in these same activities. Once
again, this reflects the challenges the Office of Advocacy faces as an independent office operating
within a much larger federal agency with an overlapping mission.

Author Information

Robert Jay Dilger

Senior Specialist in American National Government

67 U.S. Congress, Senate Committee on the Judiciary, The Regulatory Flexibility Act, report to accompany S. 1974, 95th
Cong., 2nd sess., October 11, 1978, S.Rept. 95-1322 (Washington: GPO, 1978), p. 30.
68 See SBA, Office of Advocacy, “Letter to The Honorable Olympia J. Snowe concerning the ability of small
businesses to claim the new health care tax credit under the Patient Protection and Affordable Care Act (ACA),” April
11, 2011, at https://www.sba.gov/content/response-letter-dated-041111-honorable-olympia-j-snowe-1; U.S. Congress,
House Committee on the Judiciary, Regulatory Flexibility Improvements Act of 2013, report to accompany H.R. 2542,
113th Cong., 1st sess., December 11, 2013, H.Rept. 113-288, Part 1 (Washington: GPO, 2013), pp. 49, 58-59; Sidney
Shapiro and James Goodwin, “Distorting the Interests of Small Business: How the Small Business Administration
Office of Advocacy’s Politicization of Small Business Concerns Undermines Public Health and Safety,” Center for
Progressive Reform, Washington, DC, January 2013, at http://www.progressivereform.org/articles/
SBA_Office_of_Advocacy_1302.pdf; and Randy Rabinowitz, Katie Greenhaw, and Katie Weatherford, “Small
Businesses, Public Health, and Scientific Integrity: Whose Interests Does the Office of Advocacy at the Small Business
Administration Serve?” The Center for Effective Government, Washington, DC, at http://www.foreffectivegov.org/
office-of-advocacy-report.
Congressional Research Service

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SBA Office of Advocacy: Overview, History, and Current Issues

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