The U.S. Small Business Administration's (SBA's) Office of Advocacy (OA) widely is identified by the business community as the watchdog of the executive branch that protects small businesses from burdensome regulations proposed by federal agencies. To allow the OA to perform its role effectively, Congress granted it a high degree of autonomy so it may operate as an objective evaluator of federal regulations' effects on small businesses.
Recently, key Congress members and business representatives have raised concerns that under the Obama administration the OA may not retain the level of independence it needs to continue performing its role as small-business protector. President Obama's new SBA administrator, Karen Mills, appears to have other plans for the OA that some SBA observers fear could compromise or diminish the OA's independence. Although Mills has denied this being her intention, concerns persist among lawmakers.
The OA protects small businesses by ensuring federal agencies follow the requirements of the Regulatory Flexibility Act (RFA) of 1980 as amended by the Small Business Regulatory Enforcement Fairness Act of 1996. The RFA requires federal agencies to conduct a detailed analysis of their proposed regulations' potential economic impacts on small businesses. If an agency fails to properly conduct the necessary analysis, the OA has the independence and resources to blow the whistle on the agency and conduct its own analysis of the proposed regulation's economic impact on small businesses.