Published
April 05, 2023
Our country is experiencing an unprecedented growth in new business applications, demonstrating the grit of American entrepreneurs and the tenacity of the communities who support them. In 2021 alone, a record breaking 5.4 million new business applications were filed and 5.1 million were filed in 2022.
As founders are looking at new ways to start, run, and grow their businesses, Congress and the Administration must look to modernize how the U.S. Small Business Administration (SBA) helps serve the small business community.
The last time the SBA was formally reauthorized by Congress was over two decades ago. During the COVID-19 pandemic the SBA hustled to get money to Main Street businesses, but at the same time the crisis highlighted longstanding challenges in the agency. The vast majority (88%) of small businesses support reauthorization of SBA, and the reauthorization process would be a chance to examine areas of improvement and double down on SBA strengths.
The 118th Congress can get it done—and the momentum around reauthorization is tangible. Ben Cardin, Chairman of the Senate Committee on Small Business and Entrepreneurship, has committed to reauthorizing SBA. A new report out from the Bipartisan Policy Center (BPC), in collaboration with Goldman Sachs 10,000 Small Businesses Voices, makes the case that now is the time for reauthorization. This comes after 3,000 small businesses from all 50 states asked Congress to modernize the SBA last fall during a trip to Washington.
The U.S. Chamber of Commerce supports these efforts, and strongly believes that not only should Congress reauthorize SBA, but it also needs to make sure that small businesses have a seat at the table when regulatory decisions are made. The first step in doing that is modernizing the Regulatory Flexibility Act (RFA).
The Regulatory Flexibility Act, which is overseen by SBA’s Office of Advocacy, is the federal statute intended to give small businesses a voice in regulatory decision making—and it is also sorely due for an update.
In this year alone, regulatory mandates issued by the Securities and Exchange Commission (SEC), the Federal Trade Commission (FTC), Department of Labor, the Consumer Financial Protection Bureau, and wetlands permitting rules issued by the Environmental Protection Agency (EPA) and the Army Corps of Engineers have blatantly exploited an outdated Regulatory Flexibility Act and ignored or avoided small business input.
The 118th Congress has made a good start toward addressing the RFA and SBA reauthorization. The Chairman of the House Small Business Committee, Representative Roger Williams, and the Ranking Member, Nydia Velazquez, wrote President Biden and pushed for the nomination of a Chief Counsel for Advocacy to head SBA’s Office of Advocacy, who will speak out on behalf of small businesses, and hold enforcement agencies accountable for their regulatory proposals.
In the Senate, Chairman Ben Cardin is committed to reauthorizing SBA and the Ranking Member of the Senate Small Business & Entrepreneurship Committee, Senator Joni Ernst, has introduced bi-partisan legislation to modernize the Regulatory Flexibility Act.
Small businesses are long understood as America’s economic engine. The roughly 33.2 million small businesses make up 99.9% of all U.S. firms, represent 43.5% of America’s GDP, innovate at more than 12 times the rate of larger competitors, and account for 62% of net job creation since 1995.
For a brief time, when the COVID-19 pandemic forced shut-downs, we experienced the horror of what our neighborhoods and our country would be like without many small businesses. Our Congress, our mayors, our communities came together to ensure that would not happen. And now that we are experiencing record-high business applications, we have to make sure their voices are heard.
A main pillar of the U.S. Chamber’s Agenda for American Strength is fighting aggressively against regulatory overreach. Our Small Business Bill of Rights calls on elected officials to foster entrepreneurs’ freedom to hire, innovate, grow, and strengthen their local economies and communities. The time is now for SBA reauthorization and the U.S. Chamber stands ready to work with Congress, starting with modernizing the Regulatory Flexibility Act.
About the authors
Thomas M. Sullivan
Thomas M. Sullivan is vice president of small business policy at the U.S. Chamber of Commerce. Working with chambers of commerce and the U.S. Chamber’s nationwide network, Sullivan harnesses the views of small businesses and translates that grassroots power into federal policies that bolster free enterprise and reward entrepreneurship. He runs the U.S.
