As the 110th Congress has passed its six-month mark, there is one committee that has significantly improved. This is the House Small Business Committee, which has expanded its scope to look at not just the traditional issues of Small Business Administration loans and grants, but the crushing regulatory burden facing small business in particular. New Chairman Nydia Velazquez and Ranking Member Steve Chabot deserve credit for pursuing investigations of and exploring bipartisan solutions for problematic rules.
At first glance, as well as a glance at voting records, Chabot and Velazquez appear to have little in common policy-wise. Chabot is a conservative from Ohio, and Velazquez is a liberal from the Bronx. Yet both recognize that sometimes well-intentioned regulations can hurt the “little guy,” and have used the committee as a bully pulpit to help rein in burdensome red tape.
Velazquez and Chabot have written joint letters, for instance, expressing skepticism that very minor changes to Sarbanes-Oxley regulations by the Securities and Exchange Commission and the Public Company Accounting Oversight Board will provide any significant relief. The letter urged the agencies to continue the exemption for small public companies, “at a minimum” [their words], until 2009, when the costs savings can be better calculated. They wrote another letter pressing the SEC for a cost estimate of the new Sarbox rules before the agency pushes them through. So far, the agency has not done so.
On the latter, Velazquez deserves special commendation because plaintiffs’ attorneys are such a key part of her party’s constitutency. But the committee held a fair hearing in which the burden of lawsuits to small companies was clearly shown. “We will consider all of these factors as we work to create a fair, accessible system that considers small business needs and does not create additional burdens,” Velazquez said.
Velazquez, in fact, deserves special commendation for a lot of things, of late. As I previously noted in OpenMarket, she voted for an amendment by free-market Rep. Scott Garrett (R-N.J.) to force the SEC to extend the exemption from Sarbox audit mandates for an additional year for companies with less than $75 million in assets. Velazquez’s vote for the measure, which passed with votes from about 60 Democrats and virtually all Republicans, contrasted with the “No” votes of other Democratic leaders including House Majority Whip Steny Hoyer (D-Md..) and House Financial Services Committee Chairman Barney Frank (D-Mass.). Velazquez also relentlessly grilled Chris Cox and other SEC commissioners at a Financial Services Committee hearing, asking them why the SEC had produced no cost estimates of the burden of Sarbox rules.
Of course, there are many small business subsidies the committee supports that CEI views as wasteful and unnecessary. That’s why they don’t get “three cheers.” But Velazquez and Chabot have gone a long way in a short time toward CEI’s vision, expressed in our agenda for the 110th Congress, of once again making common-sense regulatory reform a bipartisan issue. So maybe they should even get two-and-a-half cheers!