Small Businesses Saved $6.6 Billion in 2006 Thanks to Advocacy

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The Office of Advocacy of the Small Business Administration (SBA), the “small business watchdog” of the government, saved small businesses more than $6.6 billion during fiscal year 2005, according to a statement released last week. Working with federal agencies to implement the Regulatory Flexibility Act (RFA), the Office of Advocacy has helped ensure the voice of small business was heard in the regulatory process and that newly enacted rules lessen the small business burden while still achieving their regulatory goals.


“The Office of Advocacy is proud to live up to its reputation as a fighter for American small business,” said Chief Counsel for Advocacy Thomas M. Sullivan. “When the voice of small business is heard in the regulatory process, better decisions are made and better rules are written. By working closely with small business owners, their representatives, and with federal agencies, our staff showed that one-size-fits-all rules are not the best solution. Our cost savings show that many times original proposed rules can impose unintended costs on America's innovative, job-creating small businesses.”

The Report on the Regulatory Flexibility Act, FY 2005 released last Thursday by the Office of Advocacy, describes how Advocacy involvement in agency rulemakings helped secure $6.62 billion in first-year cost savings and $966 million in recurring annual savings for small entities. The regulatory cost savings include:

  • $34.55 million each year for the first two years of the Mexican Avocado Import Program.
  • $74 million over a ten-year period and an annualized cost savings of $10.5 million for the Cooling Water Intake rule.
  • $7.5 million per year for Other Solid Waste Incinerators rule.
  • $3.5 billion initially and $711 million annually for the Restriction on Fax Advertising rule.
  • $63 million for the first year of the Records Center Facility Standard requiring fire prevention and control measures in all records facilities.
  • $1.6 million per year for the Diesel Particulate Matter Exposure in Underground Metal and Nonmetal Mines rules.
  • $200 million in the first year and $200 million annually for the Hours of Service of Truckers rule.
  • $2.68 billion in the first year of the Extension of Compliance for Periodic Reports requiring businesses that raise funds from public investors to report on internal controls and audit procedures as required by the Sarbanes-Oxley Act of 2002.

Other Advocacy accomplishments highlighted in the report include:

  • Conducting 21 training session on RFA which helped increase the number of draft rules sent to the Advocacy's email notification system.
  • More agencies sought assistance from the Office of Advocacy early in the rulemaking process.
  • The Office Of Advocacy submitted two dozen written comments on a variety of agency rules.
  • More agencies considered significant alternative to their rules following discussions with Advocacy and affected small entities, evidenced in more agency rules containing realistic alternatives that would benefit small entities.
  • Ten rules that went final resulted in cost savings for small firms, and four of these are included in the Office of Management and Budget's Report to Congress on the costs and Benefits of Regulations as candidates for regulatory impact on small businesses.
  • Two RFA cases in which the Office of Advocacy participated were decided by the United States court of Appeals for the District of Columbia Circuit, resulting in the Federal Communications Commission (FCC) agreeing to more fully consider impacts on small businesses and to urge state regulators to consider the concerns of small rural telecom providers that seek waivers to the new portability rules.

Other research conducted by the SBA indicates that small businesses with fewer than 20 employees spend $7,647 per employee to comply with federal regulations annually. That is 45 percent more than the $5,282 spent by firms having 500 or more employees.

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