AGENCY FOR CONSUMER ADVOCACY Since 1967, legislation to establish a consumer agency has been introduced in every session of Congress. By whatever name, we may expect to see yet another version introduced in the 96th Congress. From past experience, it is likely the new legislation would again contain elements granting a consumer agency powers to intervene in proceedings before other agencies,. thus leading to further litigation. The indirect control thus assigned a consumer agency through litigation, issuing of subpoenas and interrogatories, and, of course, additional paperwork, would give unprecedented power to an agency which is supposed to have no independent regulatory power. Small businesses would not have the resources to combat this force they are already the targets of other regulatory agencies which find it easier to go after the "smalls" rather than the "bigs." Exempting small businesses would not necessarily alleviate the problem as they would then find themselves "caught in the middle." There is also the fear of an unfounded charge against a business being made public while those making the charge could remain anonymous. A small business could easily be wiped out on the basis of an unsubstantiated charge which could very well have been made by a competitor -- as with all things, it would be the initial charge which would be remembered by the consuming public. In essence, a bureaucracy would be established which would decide what is best for consumers, then dictate to industry what can be manufactured, to what specifications, and at what cost. There no longer would be any freedom of choice for consumers nor freedom of the marketplace to develop new products and services. While the public does need protection against unscrupulous business firms, honest firms, in turn, deserve protection from overzealous consumer activists. The Small Business Legislative Council questions whether the best way to remedy the situation is through the promotion of an atmosphere of suspicion and hostility toward business which would all but destroy free enterprise. It could, in the end, make consumers wary of virtually all the merchandise they buy. Consumers demands can be met by reputable manufacturers who charge a fair price for a product which is safe to use, free of defects and performs as advertised. The free enterprise system on the whole has served the consumer well by providing new and needed products at affordable prices. 51-438 079-11 Finally, it is a complete fallacy to believe that a single agency in Washington could solve the problems of more than 200 million individual consumers or to believe that such an agency would actually give consumers a true voice in government decision-making processes. RESOLVED The Small Business Legislative Council opposes the establishment of any agency purporting to represent consumers and having the power to intervene in proceedings before other Federal agencies and in the courts. SBLC does support a more adequate functioning of consumer interest sections in existing agencies. SBLC decries attempts at placating small businesses by any "so-called" exemptions. By Executive Order, the President's Consumer Advisor has been granted oversight authority over consumer programs in all agencies of government, thus negating the need for a separate agency. # # # EXPEDITING HEARINGS Administrative orders, citations and fines affecting small business have increased in number and widened in scope in recent years. Contesting such orders can deplete the resources of a small company. Rapid Administrative review is needed where the sum in controversy is small and the decision requires review of fact-finding rather than the invalidation of a statute, rule or regulation. Senator Mathias (R-MD) has succinctly outlined the situation confronting small business: "When confronted with a Federal order, citation or fine Regrettably, in many of these instances, neither of these "If the small business owner decides to appeal to the "If the small business owner decides to appeal to the What is needed is easy access to district courts for a quick magisterial review of agency rulings with the decision being final and not reviewable by any court or Agency. RESOLVED The Small Business Legislative Council supports legislation authorizing a small business to petition a district court for a magistrate to review a fine, citation or order of an Agency within 30 days of the ruling, where the direct dollar value of such fine, citation or order, or any part thereof, is $2,500 or less and such review does not require invalidation of statute. If the magistrate determines that the citation, order or fine is inappropriate to the alleged offense, inconsistent with previous interpretation of pertinent regulations or inequitable, he may order the Agency to rescind or modify the citation, order or fine. Where a small business has petitioned a district court for a magistrate to conduct pending proceedings, the fine, citation or order shall not be enforceable until a decision has been rendered, except when failure to enforce the fine, citation or order would result in imminent danger to the health or safety of any person. TWO-TIER REGULATION As the number of Federal regulatory agencies grows, so too does the accompanying regulatory burden upon the private sector. Traditionally, government regulation has been applied equally to all companies across the board, without regard to the company size or impact on the economy. Statutory protection of the wellbeing of American citizens, while in many areas necessary, need not be the deterrent to economic progress it has become. Small business is especially hard hit by excessive regulation, particularly when required to comply with regulations tailored to giant corporations. Unlike the larger companies, small business firms often haven't the time, personnel or expertise to meet the requirements of Federal regulations. The small business owner wears many hats in the day-to-day operation of his business -- the time and resources spent meeting often-frivolous government policy objectives erodes his effectiveness as a manager, his competitive stance, and his place in the local economy. For these reasons, a flexible, tiered regulatory system should be adopted. When General Motors and Joe's Machine Shop are required to meet the same government standards, they are not being treated equally or fairly. With respect to both substance and procedure, small business should in every case bear a different compliance burden. Since so many regulations have come into effect in an effort to control the practices of the largest companies, small business should not suffer from entanglement in the regulatory net; the social benefits of applying regulations to small firms are always diluted. Small business is different in terms of its ability to comply and also in its economic impact on the community. These facts should be recognized in all instances by the Congress and the regulatory agencies of the government by providing flexibility in all regulations, thereby leading to a reduction in paperwork and compliance burdens borne by small business. RESOLVED The Small Business Legislative Council urges the establishment of a flexible, multi-tiered system of regulation in order to equalize the compliance burden of all companies. Congress should by statute determine where flexible regulation and rules would be most applicable; and in addition, other legislative remedies, such as tax incentives to spur compliance, should be seriously considered. |