Regulatory Policy - RegWatch

RegWatch:

News & Analysis | REG•WATCH Blog | Press Room

Friday, October 21, 2005

Small Business is Not So Small
The government's definition of small business is so expansive that billion dollar corporations are receiving Katrina cleanup contracts dedicated to small businesses. From the Washington Post:

The government's list of small businesses receiving Katrina-related federal contracts along the Gulf Coast includes one of the largest debris-removal firms in the country and a billion-dollar corporation that boasts former vice president Dan Quayle on its board of directors.
Neither company is a small business by any conventional standard. But because of a loophole in federal regulations, a company can be counted as one if it was once small even if it is not now, raising questions about the statistics the government has been citing to defend itself from charges that it has favored big companies in the massive Hurricane Katrina cleanup.

Big businesses taking advantage of special breaks provided for small businesses is not limited to Katrina clean up.

A study last year for the Small Business Administration found $2 billion worth of contracts awarded in fiscal 2002 that were listed as going to small businesses that were not really small. A Government Accountability Office review in 2003 found $460 million worth of small-business awards to five large firms in fiscal 2001.
"This is not an occasional occurrence. This is a problem they've had for quite some time. And they seem either unwilling or unable to correct it," said Steven Sims, vice president of the National Minority Supplier Development Council, a trade group.

Businesses that fall under the SBA's definition receive preferential treatment in the rulemaking process and in Congressional initiatives for regulatory reform. Under the Regulatory Flexibility Act, regulators have to consider the impact of regulations on small businesses. In Congress, legislators continually hold up the plight of small businesses as a rationale for regulatory reform. Yet the businesses that benefit are rarely the romanticized mom and pop store. Large corporations are in better position to take advantage of these special breaks while real small businesses are continually left out in the cold.

Read more: Small Businesses Not So Small

Posted by Genevieve Smith, 12:17:42 PM

Thursday, October 20, 2005

NSR: A Second Bite at the Apple
With slim chances of passing in Congress, a controversial change to the designation of new source review is now snaking its way through the regulatory system. The regulation would allow power plants to make modifications to existing equipment without installing new pollution technology if their hourly emissions rates do not increase. By changing the way power plant emissions are calculated from an annual output to an hourly output, plants would be allowed to pollute more per year by operating for longer hours. From the New Standard:

"This latest attack by the Bush administration to dismantle [New Source Review] comes from a new angle," the Sierra Club’s Nat Mund explained in a statement Friday. "Simply put, a power utility could refurbish a plant so that it does not release more pollution per hour, but could double the operating time thus releasing more pollution over the course of the year. . . ."
"This is the Clean Air Act we're talking about, not the Hourly Efficiency Act," [National Environmental Trust Vice President John] Stanton said in a statement. "A plant can be more efficient, and yet a bigger polluter if it runs for more hours. That means more soot and smog pollution, more asthma attacks, and more deaths."
Earlier this year, a federal court rebuffed states seeking more stringent enforcement of New Source Review. The ruling also required the EPA to clarify its New Source Review-related rule making, leading EPA administrator Stephen L. Johnson to propose the new rules, the agency said in announcing the changes.
In August, the Natural Resources Defense Council obtained and leaked an internal EPA document warning that the rule now being proposed could seriously undermine agency enforcement actions across the country, the Washington Post reported.
House leaders dropped a nearly identical measure from the recently passed Gasoline for America’s Security Act.

The case is an example of the way industry interests abuse the regulatory process in order to get a second bite at the apple, taking controversial policies they cannot win in Congress and sneaking them into agency regulations. The proposed rule was published today in the Federal Register and will be open for public comment through Dec. 19.

Posted by Genevieve Smith, 12:11:30 PM

Latest Entries by Theme

Cost-Benefit Analysis