Advocate aims to work himself out of a job
Thomas M. Sullivan, head of the Small Business Administration’s Office of Advocacy, aims to work his office out of existence.
As the fifth chief counsel to head the office created in 1976 as an independent voice for small business within the federal government, Sullivan would like to see the day that all 90-plus federal agencies take small businesses into account during rule making without prodding.
Regulations from those federal agencies cost businesses about $1.1 trillion, according to a recent report published by his office. That price tag in part spurred his office to shift its focus recently to include existing regulations, not just proposed rules, when it advocates for small business.
“It raises the issue enough for us not to have any excuse not to move forward on this,” Sullivan said.
He oversees a team of lawyers, economists and regional advocates who work to ensure that small businesses are considered when agencies make new rules or revise old ones. The office also takes small business seriously as a subject for formal economic study, publishing data and soliciting research on the sprawling sector comprising 25 million businesses nationwide.
His office’s research shows that small firms spend 45% more to meet regulatory requirements than their larger competitors.
Spurred by a critical General Accounting Office report last August, Sullivan rolled out the Regulatory Review and Reform initiative, known as r3, at the end of the summer to tackle rules on the books that might benefit from changes. This month Sullivan announced 10 rules he had picked for a revamp.
How are your tactics different from those of prior chief counsels?
The first is that right out of the box, the president issued an executive order that really upped [our] internal strength. I say internal because changes to rules ultimately are the decision of heads of agencies. So all we can do is kind of prod those agencies to do what we would like them to do.
Prod?
Prod -- right -- cajole, sweet-talk, plead, beg, whatever it takes to try to have them focus on the sensitivity of the economics, both social and practical, of how the rules impact small business. The executive order greatly increased our strength in that advocacy arena because it wasn’t just this independent office. It was the president of the United States saying, ‘You should listen to Tom Sullivan.’ Now it doesn’t say that explicitly, but it’s between the lines. The only thing I’ve done different is our state model-bill initiative. We’ve taken how regulatory flexibility works in Washington, and we’ve taken examples from how it works in different states and put them together in model legislation that we call regulatory flexibility. We have had activity on this legislation for the past five years in over 34 states signed by 24 governors, including executive orders. Very soon we will have Kansas and Utah on board, knock on wood.
From your national perspective, how do the California regulatory burden and reform efforts look compared with those of other states?
I think the small-business community in California has greater concerns about the morass of regulations coming out of the local and state level than any other state. I think that’s fair to say. It’s not me speaking. It’s folks I hear from in California. But I’m very careful to say local and state regulations. It’s not all Sacramento’s fault.
It seems that the feeling often is that it’s so beneficial to do business in California that small businesses are going to put up with all of the rules and regulations.
Right. You know, I’ve got to caution the leadership of California not to take that for granted. We are dealing with a global challenge. Look at what member states of the European Union are confronted with in their dealing with rules and regulations coming out of Brussels. [Britain] is about to roll out a regulatory budgeting program that is ahead of the curve globally on regulatory reform. When the business climate becomes unacceptable, small businesses can move. And when they move, it’s not just a matter of pennies going away. It’s a ripple effect that’s very dangerous to the state economy.
You’ve cautioned small businesses against becoming numb to regulatory costs.
It’s a very dangerous situation, because what happens is you lose the constructive input, not only on pushing back but getting more constructive solutions to the problem, and that’s where our model legislation and also what we do in Washington is most grossly understood. We’re not against regulation. We’re about making sure that a regulation benefits from small-business input.
If Congress passed the right set of rules, couldn’t the SBA’s advocacy role be done by the individual agencies?
Is there something special that says that a federal office has to be the only entity studying job growth in small business, studying innovation and growth? No. There’s not. Now I think we have a ways to go before more and more people look at small business as a legitimate field of economic study. On the regulatory advocacy that we do, our job is to work ourselves out of existence.
You plan to do another round of reform nominations?
Yes, absolutely. And that’s actually what I’ve really got to focus on. I’ve got to focus on two things. One is convincing the agencies that we are helping to prioritize and getting commitments to review. Then reform follows. The second step is really convincing agencies and small-business stakeholders that this is a legitimate, long-term initiative. This is not Sullivan’s last hurrah. [The Government Accountability Office] pointed out that we should have been doing this for a long time. So we should admit that they are right and just do it.
You will be leaving when the new president comes in, and there’s no guarantee that the initiative will continue.
I’m confident of its surviving from a number of instinctual senses that I have. One is the need for an ongoing annual spring cleaning. The other is the power of the small-business constituency and the buy-in of this initiative from small-business advocacy groups who are committed to engaging long term, and Republican and Democratic leadership in the House and Senate.
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(BEGIN TEXT OF INFOBOX)
SBA Office of Advocacy
Top executive: Thomas M. Sullivan, chief counsel
Purpose: To reduce the burden of federal regulations on small businesses, to publish small- business statistics and to conduct economic research
Staff: 45, including 10 regional advocates
Budget: $9.89 million
Sullivan’s background: He has been chief counsel since February 2002. He previously held executive posts at the National Federation of Independent Business Owners, a Washington-based group. He was a congressional liaison for the Environmental Protection Agency during law school and full-time from 1994 to 1998.
Contact: Online at www.sba or Michael Hull, the Phoenix-based regional advocate responsible for California, at (602) 745-7237
