Prove It Act of 2024

Floor Speech

Mr. Speaker, H.R. 7198, the Prove It Act, represents the latest effort by Republicans to dismantle the regulatory process, giving well- resourced special interests a powerful new cudgel to wield against regulations, while causing harm to the very small entities the bill purports to help.

This legislation would vest enormous and unreviewable authority over agency rules to the chief counsel of the Office of Advocacy within the Small Business Administration, a chronically underfunded office that has not even had a Senate-confirmed leader since 2017.

It authorizes the chief counsel, unilaterally and without review, to exempt large parts of the business community from proposed rules if he or she determines that an agency did not properly consider how a proposed rule would affect small entities.

Not only would this broad and vaguely defined authority apply to proposed regulations, but the bill would also charge the chief counsel with tracking agencies' completion of mandatory reviews of existing rules every 10 years. If they find that an agency failed to conduct the required review of the rule, they can simply suspend operation of the rule.

I note that, while this legislation would impose significant new burdens on the SBA, it would provide no additional funding to carry out these duties, putting a further strain on the agency's ability to assist small businesses.

Our public agencies are responsible for writing rules that protect our community from harm. They make sure that the toys our children play with are safe. They make sure that the vehicles we drive and the buildings we live in are up to code. They make sure that the legislation we pass in Congress for tackling issues like climate change and public health are implemented as we intend.

The Prove It Act would grind all of this to a halt. Rules that would ban toxic chemicals or take contaminated food out of the market would hang in limbo while petitions mount before this single official to complete his or her reviews, if he or she can ever complete them at all.

This bill is not about lessening the burden on small businesses. By law, agencies already must take small businesses into account. These small entities already have power through the Office of Advocacy to champion their concerns, so the bill is entirely unnecessary if that was truly the purpose of the bill.

In reality, this bill is about giving big businesses the ability to shut down the regulatory process. Any group that merely purports to represent small businesses, no matter how large or well-resourced they may be, could petition this one official to block a pending rule they do not like. There would be no limit to how many times they do this. This is a recipe for chaos and dysfunction. That, of course, is the point.

Republicans do not want to empower the agencies that ensure the drugs we take are safe, that ensure child car seats protect the most vulnerable among us, and that enforce our competition laws to ensure that small businesses have a chance to thrive. They want to throw sand in the gears of these agencies to ensure that they never issue the regulations we depend on to keep us safe.

This bill would do little to help small businesses, but it could prove to be a windfall for powerful companies and special interests. It is no surprise, therefore, that this legislation is right out of the Project 2025 playbook, which calls for ``supercharging'' the Office of Advocacy at the SBA so the entity can ``dismantle extreme regulatory policies and advance limited-government reforms.''

Republicans are so determined to carry out this dismantling of the regulatory process that they are even willing to violate their own House rules against legislation that will increase mandatory spending, ignoring a CBO estimate that the bill would add millions of dollars to the deficit.

We all want to ensure that small businesses can thrive, but this bill would not help them. Instead, it would create uncertainty and chaos while giving big businesses a new tool to dismantle the regulatory process that protects public health and safety and that protects consumers from rising costs.

Mr. Speaker, I urge all Members to oppose this legislation, and I reserve the balance of my time.

Mrs. LEE CARTER. Mr. Speaker, I thank the gentleman for yielding me time.

Mr. Speaker, I rise in opposition to H.R. 7198, the Prove It Act of 2024, a bill that would vest the chief counsel of the Office of Advocacy within the Small Business Administration, which has been chronically underfunded--and I wish we were spending time on that instead of this bill--with enormous and unreviewable authority over agency rules.

More specifically, H.R. 7198 authorizes the chief counsel, unilaterally and without review, to exempt large parts of the business community from proposed rules if he or she determines that an agency did not properly consider how a proposed rule could affect small entities.

In doing so, this bill would empower large companies and undermine the regulatory process that keeps Americans safe by imposing a series of requirements on regulatory agencies.

As we all know, regulatory agencies play a critical role in our safety and well-being by writing rules designed to protect our food supply, environment, physical infrastructure, and more. These regulations safeguard the freedoms that all Americans enjoy.

While efforts to ease burdens on small businesses can be useful, they should not prevent regulators from doing their jobs in the public interests.

The Prove It Act, under the guise of helping all small businesses, would actually allow an unelected administrator within the SBA to circumvent congressional and agency intent with little oversight. It is simply unacceptable that we would task a single official in the SBA with unilateral and unreviewable authority to suspend new and existing protections and safeguards for large swaths of the economy, not to mention that it would also require agencies to jump through new, vaguely defined and nontransparent bureaucratic hoops, which would cause delays and uncertainty, all the while doing nothing to actually help small businesses.

In fact, the Coalition for Sensible Safeguards, consisting of over 200 labor, consumer, and environmental organizations, oppose this bill, including the AFL-CIO, Economic Policy Institute, and National Women's Law Center.

It is important to convey to the American people that this bill is also simply unnecessary. By law, agencies already take small businesses into account, and these small entities already have power through the Office of Advocacy to champion their concerns.

Rules and protections are critical to ensuring the safety and soundness of virtually every facet of our lives, including clean air, clean water, safe toys that my children might use, safe cars while I drive my children to school, and safe workplaces for all of us.

Mr. Speaker, we should reject any efforts that would prevent agencies from issuing these lifesaving regulations. Therefore, I urge my colleagues to vote against H.R. 7198, the Prove It Act.

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Mr. NADLER. Caraveo).

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Mr. NADLER. Mr. Speaker, over 200 labor, consumer protection, and environmental organizations oppose H.R. 7198, the Prove It Act.

Mr. Speaker, I include in the Record letters of opposition from the Coalition for Sensible Safeguards, Earthjustice, and Public Citizen. Coalition for Sensible Safeguards, December 4, 2024. Representative Mike Johnson, Speaker, House of Representatives, Washington, DC. Representative Hakeem Jeffries, Democratic Leader, House of Representatives, Washington, DC.

Dear Speaker Johnson and Democratic Leader Jeffries: The Coalition for Sensible Safeguards (CSS), an alliance of over 200 labor, scientific, research, good government, faith, community, health, environmental, and public interest groups, is writing regarding the House of Representatives' consideration of the Prove It Act of 2024, H.R. 7198 which CSS strongly opposes.

The Prove It Act would expand the authority of the Small Business Administration's Office of Advocacy while failing to address fundamental flaws of the Regulatory Flexibility Act. This bill would slow down the regulatory process and empower an office that has been neither appropriately focused on small business concerns nor adequately transparent in how it conducts its actions.

The ostensible purpose of the Regulatory Flexibility Act is to ensure that small businesses continue to play a role in the U.S. economy. In practice, though, the implementation of the Regulatory Flexibility Act has failed to achieve this basic purpose, as it has instead been wielded as a blunt weapon to weaken regulatory requirements for firms of all sizes, often at the behest of large corporations and the trade associations they dominate.

The result is that protections of public health, safety, and the environment have been sacrificed without substantially improving the competitive position of small businesses in their respective industrial sectors relative to that of larger firms. These flaws are most apparent in the Regulatory Flexibility Act's burdensome analytical requirements, which are designed to weaken regulatory safeguards rather than promote small business competitiveness. H.R. 7198 does not fix this basic problem, however. Instead, it would expand those analytical requirements and make them more onerous.

The Prove It Act would enhance the authority of the Small Business Administration's Office of Advocacy in harmful ways. H.R. 7198, in Section 2(a)(3), would allow for endless petitions from ``Any small entity, group of small entities, or organization representing the interests of small entities'' that challenge a rulemaking agency's certification that its rule would not have a significant economic impact on a substantial number of small entities. In many cases, these petitions would trigger burdensome hearings conducted by the Chief Counsel for the Office of Advocacy, after which the Chief Counsel could then force the rulemaking agency to retract the certification and instead perform the full suite of burdensome analyses mandated by the Regulatory Flexibility Act. The bill also provides for expanded judicial review opportunities against agency certifications, which would further tie up rulemakings in wasteful and time-consuming litigation.

We urge members of the House of Representatives to consider reforms that would instead place greater constraints on the Office of Advocacy to ensure that it is actually helping, rather than harming, small businesses. A scathing 2014 report by the Government Accountability Office (GAO) found significant deficiencies in the Small Business Administration's Office of Advocacy's compliance with its own internal procedures when it intervenes in regulatory actions or engages in commissioning research on regulatory costs to small businesses. Of greatest relevance, GAO found that: (1) the Office had no policies dictating when individual staff should intervene in individual rulemakings, making it susceptible to improper industry influence; and (2) the Office repeatedly cited small business input in its regulatory comments but could provide no evidence or documentation supporting this input.

Evidence has also demonstrated the extent to which the Office of Advocacy has been captured by regulated industry. The Office has often worked with large trade associations to weaken rules in ways that benefit large businesses, at the expense of small ones. These interventions have the effect of harming small businesses, contrary to the Office's statutory mission. Nevertheless, this bill would give the Small Business Administration's Office of Advocacy even greater authority to intervene in and block agency rules.

Additionally, the Prove It Act would further delay needed regulatory actions--causing real harm to public health and safety and the environment--without improving the quality of agency decision-making. Numerous studies have demonstrated how existing regulatory analyses, and procedural requirements contribute to extensive delays of agency rulemaking. These studies confirm that existing Regulatory Flexibility Act requirements are among the biggest contributors to these delays. By creating new analytical and procedural requirements, this bill would only worsen those delays. These additional delays are unjustifiable because they do not result in better regulatory decisions.

Finally, the bill would empower the federal judiciary to block regulations by making agency compliance with its new analytical and procedural requirements judicially reviewable. This would provide judges with an additional new tool for blocking needed public protections.

Providing the Small Business Administration's Office of Advocacy with more authority to block, delay, or weaken new regulatory safeguards, without enacting the significant reforms recommended by GAO and others, will leave the public even more at risk to health, safety, and economic security threats. The numerous petitions, time-consuming hearings, and expanded judicial review that this legislation would allow will thwart needed protections while failing to help small businesses with better designed regulations.

CSS urges the House of Representatives to oppose the Prove It Act and encourages the Committee to evaluate proposals that offer real and meaningful reforms to strengthen the regulatory process, such as H.R. 1507, the Stop Corporate Capture Act.

We hope to work with the House of Representatives to ensure that our regulatory process is working effectively and efficiently to protect the American public.

We strongly urge opposition to the Prove It Act of 2024, H.R. 7198. Sincerely, Rachel Weintraub, Executive Director, Coalition for Sensible Safeguards. ____ Earthjustice, Washington, DC, November 26, 2024. Hon. Mike Johnson, Speaker, House of Representatives, Washington, DC. Hon. Hakeem Jeffries, Democratic Leader, House of Representatives, Washington, DC.

Dear Speaker Johnson and Leader Jeffries: On behalf of Earthjustice, I strongly urge you to oppose H.R. 7198, the Prove It Act, which would further a dangerous deregulatory agenda to restrict federal agencies from protecting our environment, health, safety, workforce, and civil rights.

The Prove It Act is an unnecessary deregulatory legislative proposal that seeks to address a problem already addressed by existing Federal law. Proponents of the bill believe small businesses are not allowed enough opportunities to engage directly with agencies to impact the policies, ultimately limiting and hindering their ability to conduct business, create jobs, and compete with larger corporations. The narrative that the rulemaking process leaves small businesses little to no opportunity to address potential economic impacts and engage directly is inaccurate and perpetuates dangerous deregulatory propaganda.

Despite being debilitating underfunding, Agencies are charged with complying with overarching federal requirements that consider impacts on all industries, including small businesses. Agencies, when proposing new rules, are legally bound by the constraints of the authorizing statute passed by Congress, the Administrative Procedure Act, providing appropriate notice and comment opportunities to the public, listening to the public and regulated entities (including small businesses), and carefully reviewing all submitted comments. Small businesses are provided multiple avenues to engage in the rulemaking process and compliance resources through state and federal government offices, including the US Small Business Administration. Businesses can use the Office of Advocacy and the Office of the National Ombudsman within the U.S. Small Business Administration (SBA) to address compliance concerns, make regulatory reform recommendations, and handle enforcement issues.

H.R. 7198 is a tool to help polluting corporations limit their compliance responsibilities and unfairly shift the cost of business to the public. Like other past attempts, this bill seeks to expand the scope of authority of the Regulatory Flexibility Act, which would increase unnecessary and lengthy regulatory delays and encourage costly litigation. The Regulatory Flexibility Act (RFA) already requires agencies to consider alternatives to proposed regulations to limit economic burdens to small entities while still achieving the desired regulatory goals. Agencies must conduct initial regulatory flexibility analysis, assessing potential impacts on small entities and consider the feedback provided by small entities during the rulemaking process. This bill would cost additional resources and time by allowing small entities to require duplicative regulatory analysis to rules they would rather not comply with.

Most concerning are the provisions of H.R. 7198, which allow any small entity or organization representing a small entity to petition the Chief Counsel of Advocacy for the Small Business Administration to direct any agency to adopt a new determination of the economic impact on small businesses. If the agency does not do so or ``in any other way fails to assist the Chief Counsel,'' the rule will be ineffective and invalidated for all small entities.

Regulations are vital to the public and small businesses, yielding many benefits that outweigh the costs. H.R. 7198 act seeks to delay these public protections at the detriment of the environment and the public, yielding health and environmental benefits for all who live here. While regulations are associated with compliance costs and administrative burdens, they can also provide significant benefits to small businesses, including but not limited to bolstering consumer confidence in their products and services, leveraging the playing field by setting standards all must meet, including larger competitors and preventing monopolies or unsafe work environments, access to certain kinds of federal contacts, and limiting legal liabilities related to workplace safety or product safety issues.

For all the reasons stated above, H.R. 7198 should be opposed.

Thank you for your consideration. Brielle L. Green, Senior Legislative Counsel, Earthjustice. ____ Public Citizen Washington, DC; December 4, 2024. Hon. Mike Johnson, Speaker, House of Representatives, Washington, DC. Hon. Hakeem Jeffries, Democratic Leader, House of Representatives, Washington, DC.

Dear Speaker Johnson and Democratic Leader Jeffries: On Thursday, December 5, the House of Representatives will be considering the Prove it Act of 2024, H.R. 7198. While Public Citizen opposes H.R. 7198, this letter does not focus on Public Citizen's concerns regarding that bill which are outlined in a separate letter submitted to the members of the House from the Coalition for Sensible Safeguards which Public Citizen co-chairs. Instead, this letter is intended to provide information that we believe will help assess the current Administration's compliance with the Regulatory Flexibility Act (RFA) as compared to prior Administrations. As the government data we cite below shows, the current Administration has complied with the RFA to a far greater degree than the previous Administration. Thus, any claims that the current Administration is not complying with the RFA are not supported, and in fact contradicted, by the government data we are sharing with members of the House.

One of the most telling indications whether an Administration is in compliance with the RFA comes from the number of so-called ``SBREFA'' panels that an Administration has conducted as compared to previous Administrations. Under the Small Business Regulatory Enforcement Fairness Act (SBREFA), three agencies, the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), and the Consumer Financial Protection Bureau (CFPB) are required to conduct small business review panels prior to proposing regulations that will have a ``significant impact on a substantial number of small entities.'' The Small Business Administration's Office of Advocacy (SBA Advocacy) plays a central role in identifying small businesses to serve on the panel and collect their feedback. SBREFA amended the RFA to require these panels in order to provide small businesses an opportunity to express concerns to these three agencies when one of their regulations significantly impacts small businesses. To be clear, these three agencies have put in place regulations that have been among the most beneficial in protecting the public.

Our analysis of the number of SBREFA panels that occurred from the Obama Administration through the current Administration reveals a clear pattern of robust compliance with the RFA under the Obama and Biden Administrations with the opposite being the case under the Trump Administration. According to data from SBA Advocacy's website, there were a total of 31 SBREFA panels completed under the Obama Administration. By contrast, there were a total of only 3 SBREFA panels completed under the entire Trump Administration. Under the current Administration, there have already been 22 SBREFA panels completed. Thus, the three agencies subject to SBREFA completed a total of 53 panels during the Obama and Biden Administrations, but only 3 panels during the Trump Administration.

Such a significant disparity in the number of SBREFA panels under the current and previous two Administrations should be concerning to the Committee as it gives the strong appearance that the SBREFA panel process is hardly neutral but rather is one-sided in practice by only seeking feedback from small businesses when the three agencies subject to SBREFA promulgate new regulatory protections but not when those regulatory protections are rolled back. The Committee should ensure that when small businesses face a less stable regulatory environment and more regulatory uncertainty due to regulatory rollbacks, the SBREFA panel process is reflecting those concerns as intended.

Additionally, Public Citizen urges Congress to conduct robust oversight of SBA Advocacy due to longstanding concerns that Advocacy has ignored certain small business viewpoints, namely those that support federal regulations, while favoring other small business viewpoints, namely those that oppose federal regulations, in an unbalanced and asymmetric fashion. While claiming to be ``independent,'' there is considerable evidence that Advocacy is in reality acting in a partisan and ideological manner by consistently scrutinizing and expressing concerns about new federal regulations that protect the public while doing the opposite when those regulations are rolled back. Certainly, the data regarding the number of SBREFA panels across recent Administrations strongly supports the need for oversight from the Committee.

We hope members of the House of Representatives will find this information helpful as it assesses claims regarding the current Administration's compliance with the RFA and considers H.R. 7198 predicated on the false belief that the current Administration is failing to comply with the RFA. Public Citizen stands ready to assist Congress in any potential oversight of agency compliance with the RFA and whether SBA Advocacy is properly carrying out its responsibilities under the RFA in a neutral and unbiased fashion. Sincerely, Lisa Gilbert, Co-President, Public Citizen.
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Mr. NADLER. Velazquez), the distinguished ranking member of the Committee on Small Business.

Mr. Speaker, the Prove It Act is just the latest in a long line of Republican bills meant to undermine or block agency rulemaking. If this legislation is enacted, every single rule--past, present, and future-- would be funneled for review through a single official in a chronically underfunded office within the Small Business Administration. This one person would be granted unreviewable and unilateral power to block or suspend lifesaving regulations that ensure that we have clean air to breathe, clean water to drink, and safe food to eat.

I urge Members to oppose this dangerous legislation, and I yield back the balance of my time.

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