Statements on Introduced Bills and Joint Resolutions S. 818

S 818. A bill to ensure the independence and nonpartisan operation of the Office of Advocacy of the Small Business Administration; to the Committee on Small Business and Entrepreneurship.

Mr. KERRY. Mr. President, I am pleased to join with my friend and colleague, Chairwoman of the Senate Committee on Small Business and Entrepreneurship, OLYMPIA SNOWE, in reintroducing the "Independent Office of Advocacy Act", which our Committee and the full Senate endorsed unanimously last Congress. This legislation will help ensure the Small Business Administration's, SBA, Office of Advocacy has the necessary autonomy to remain an independent voice for America's small businesses. I would like to thank Senator SNOWE and her staff for working with me and my staff to make the necessary changes to this legislation to garner bipartisan support.

The independent Office of Advocacy Act rewrites the law that created the Small Business Administration's Office of Advocacy to allow for increased autonomy. It reaffirms the Office's statutory and financial independence by creating a separate funding account for the Office from the General Fund of the Treasury instead of being allocated through the SBA's annual appropriation.

At its heart, this legislation will allow the Office of Advocacy to better represent small business interests before Congress, Federal agencies, and the Federal Government without fear of reprisal for disagreeing with the position
of any current Administration.

For those of my colleagues without an intimate knowledge of the critical role the Office of Advocacy and its Chief Counsel play in protecting and promoting America's small businesses, I will briefly elaborate its important functions and achievements. From studying the role of small business in the U.S. economy, to promoting small business exports, to advocating for the best interests of small business in a myriad of areas, to lightening the regulatory burden of small businesses through the Regulatory Flexibility Act, RFA, and the Small Business Regulatory Enforcement Fairness Act, SBREFA, the Office of Advocacy has a wide scope of authority and responsibility.

The U.S. Congress created the Office of Advocacy, headed by a Chief Counsel to be appointed by the President from the private sector and confirmed by the Senate, in June of 1976. The rationale was to give small businesses a louder voice in the councils of government.

Each year, the Office of Advocacy advises Congress and the executive branch regarding policy issues affecting small businesses, brings together small business people with members of Congress, congressional staff and executive branch officials to resolve issues affecting small business, publishes numerous studies and reports, compiles vast amounts of data and successfully lightens the regulatory burden on America's small businesses. In the area of contracting, the Office of Advocacy developed PRO-Net, a database of small businesses used by Federal contracting officers to find small business interests interested in selling to the Federal Government.

The U.S. Congress, the Administration, and, of course, small businesses have all benefited from the work of the Office of Advocacy. In October 2001, an Advocacy research study titled, The Impact of Regulatory Costs on Small Business, established that small businesses with less than 20 employees spend nearly $7,000 each year, per employee just to comply with Federal regulations and mandates. By working with Federal agencies to implement the Regulatory Flexibility Act, the Office of Advocacy in 2002 saved small businesses over $21 billion in foregone regulatory costs that can now be used to create jobs, buy equipment and expand access to health care for millions of Americans.

Small businesses remain the backbone of the U.S. economy. According to a study conducted by the Small business Administration Office of Economic Research and released in January 2003, small businesses account for approximately 99 percent of all employers, account for 51 percent of private-sector output, represent 52 percent of GDP and, in 2002, provided two-thirds of all net new jobs.

Small businesses have also taken the lead in moving people from welfare to work and an increasing number of women and minorities are turning to small business ownership as a means to gain economic self-sufficiency. Put simply, small businesses represent what is best in the United States economy, providing innovation, competition and entrepreneurship.

Their interests are vast, their activities divergent, and the difficulties they face to stay in business are numerous. To provide the necessary support to help them, SBA's Office of Advocacy needs our support.

The responsibility and authority given the Office of Advocacy and the Chief Counsel are crucial to their ability to be an effective independent voice in the Federal Government for small businesses. This bill has been endorsed by the U.S. Chamber of Commerce, the Small Business Legislative Council and the National Federation of Independent Businesses. Small businesses are asking us to do everything we can to protect and strengthen this essential office. I believe this legislation accomplishes that important goal.

I have always been a strong supporter of the Office of Advocacy and I am pleased to join with Chairwoman SNOWE in introducing this legislation, which will ensure that the Office of Advocacy remains an independent and effective voice representing America's small businesses.