Regulatory Flexibility Act - The 1995 White House Conference and SBREFA

The 1995 White House Conference and SBREFA

In June 1995, a third White House Conference on Small Business examined the RFA's weaknesses. Despite the Clinton Administration's support for strengthening the law, as exemplified in the Vice President's recommendation in the National Performance Review, the key element for doing so—judicial review of agency compliance—remained missing.

Once again, a White House Conference forcefully addressed the problem. One of its recommendations fine-tuned the regulatory policy recommendations of earlier conferences, asking for specific provisions that would include small firms in the rulemaking process.

In October, the Office of Advocacy issued a report, based on research by Thomas Hopkins, that estimated the total costs of process, environmental, and other social and economic regulations to be between $420 billion and $670 billion in 1995. The report estimated that the average cost of regulation was $2,979 per employee for large firms with 500 or more employees and $5,532 per employee for small firms with fewer than 20 employees. (A successor study by Mark Crain, in 2005, documented a similar pattern.)

In March 1996, President Clinton acted on the 1995 White House Conference recommendation that was taken up by Congress, by signing Public Law 104-121, the Small Business Regulatory Enforcement Fairness Act (SBREFA). The new law finally strengthened the RFA in the way that previous reports and conferences had recommended. Perhaps most significantly, it gave the courts jurisdiction to review agency compliance with the RFA.

SBREFA also mandated that the United States Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA) convene small business advocacy review panels to consult with small entities on regulations expected to have a significant impact on them, before the regulations were published for public comment.

Also, the law reaffirmed the authority of the chief counsel for advocacy to file amicus curiae (friend of the court) briefs in appeals brought by small entities from agency final actions.

Since 1998, the Office of Advocacy's Annual Reports on RFA Implementation have calculated regulatory cost savings attributable to the RFA. Through FY 2007, these savings have totaled over $200 billion, of which $156 billion are recurring savings each year.