the Small Business Administration has no problem that will be more important to the small business community." This view has not changed; a strong advocacy program within the SBA should have top priority. Without it, small business will continue to lack the representation within the Federal government and before Congress which it merits.

For this reason, NFIB is very pleased to see included, under Title I of the bill, a detailed proposal to create an Advocacy and Economic Research and Analysis Division within SBA. Such a Division, if properly staffed and funded, has the potential of accomplishing, for the first time since the SBA was established, the original intent of the Sm iness Act, that is, to "encourage and develop... the actual an cial capabilities of small business" and to "aid, counsel, assist and protect the interests of small business concerns."

NFIB can attest to the fact that there is now a lack of statistical information on small business within the agencies and departments of the Federal government (or in other places for that matter). And much of that existing data is either not published or not published in useable forms. But, we are all aware that it is extraordinarily difficult to identify specific problems, determine their pervasiveness, and draft reasonable solutions without it. While case studies, in the form of letters relating personal experiences, are fine as illustrative material, they are no substitute for numbers properly analyzed. All too often, NFIB has been forced to come to the Congress arguing a case using "our best judgment", "members tell

us", or "ball park figures". That makes us very uncomfortable as we are certain it does the Congress. In fact, it has all too often been the sympathetic consideration of the Congress rather than any statistical argument that has carried the day for small business. Title I contains a comprehensive delineation of specific duties that are to be performed by the Associate Administrator and his staff on a continuing basis. Many of these duties, including studies on various topics such as the impact of taxation or the cost of government regulation, will, if conscientiously performed, result in a more favorable estimation of SBA's worth, both in and out of government, as well as enable the Advocate and other groups to plead the case of small business more effectively. Clearly, Title I is intended to make sible for SBA to be an activist

Agency, and NFIB supports this concept fully.

While

There is, however, what NFIB would consider a flaw in the structure of the Advocacy Division as established in the bill. the reports containing the findings and recommendations of the Division would not have to be submitted to anyone outside of SBA before being delivered to the Congress, the President, and the Council, the Associate Administrator of the Division would be clearly in the chain of command under the SBA administrator and, therefore, subject to the Administrator.

We believe this will hamper the efforts of the Advocate in protecting the interests of small business. If we are to insure that the Advocate will be an independent representative of small business, reflecting its interests and priorities instead of the Administration's, the head of the Advocacy Division must not be

subject to control by the SBA Administrator.

While we have no

reason to believe that there will develop an adversary relationship between the two, we must realistically assume the potential for a conflict on some specific issues. After all, the Administrator is a political appointee who will be expected to support the Administration's position. And the Adminstration's position will not

always be the same as small business'.

NFIB's fears are not groundless.

We have seen evidence of just

such a conflict over the Agency for Consumer Advocacy. Earlier this month, SBA sent a letter to all Members of Congress indicating the Agency's support of S. 1262 and H.R. 6805 "consistent with the President's position on this matter". But NFIB is in possession of a memo clearly demonstrating the Advocacy Office's differing view of these bills.

The position taken by .

'gency for Consumer Advocacy

is not the point. The point is that the Agency adopted the Administration's position when the Office of Advocacy did not feel that position was in the best interests of small business. It could happen in any Administration, with any Administrator, over any issue. Our concern for the independence of the Advocate is muted in determining SBA internal policy and programs. Any recommendations made by the Advocate in this area should be subject to approval by the Administrator, in keeping with his role as head of the Agency. But any studies and resultant recommendations with regard to nonSBA matters should be made independently by the Advocate, in keeping with his role as counsel and partner to small business.

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regulatory and legislative

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NFIB urges the Committees to reconsider the proper role of

the SBA Advocate and restructure his position in the Agency so at to remove any chance that he or she will be influenced by political considerations.

The Declaration of Small Business Investment Policy in Title II is our second concern. Although we are not certain of the intent of this language, we find striking similarities between the language in this section and the language normally used to describe credit allocation programs and long-range national economic planning policies. We would hope that these are not the tools intended to safeguard the interests of small business, because small business wants no part of them.

NFIB has polled its membership to determine their views on economic planning. On both occasions, the results revealed a decidedly negative attitude towards such planning. The response

to credit allocation was even more striking. We asked whether the Federal Reserve Board should have the authority to allocate credit on a priority basis, making it clear to our members that small business would be among the sectors given top priority. Despite the competitive edge such priority would give to small business, our membership opposed the proposal.

These votes clearly reflect small business disinterest in government policies that interfere with the normal course of competition in the marketplace, even if those policies would be of benefit to small business.

Aside from these two points of concern, NFIB finds much in this bill to support wholeheartedly. For example, the elevation of the

SBA Administrator to Cabinet-level status is, in our opinion, a key element in making government more responsive to small business. I have already discussed the importance of an effective Advocate in monitoring the actions of Congress and the agencies, and in measuring the impact on small business of the various regulatory and legislative proposals. Equally important, however, is an Administrator who is accepted as a peer by top-level advisors and department heads, who has easy access to the President, and who sits on the Domestic Council and other similar policy-planning bodies. With the Cabinetlevel status, the SBA Administrator would have a chance not heretofore possible to help determine domestic policy, and to influence those decisions made at the highest levels of the Executive Branch which impact small business and the nation. More importantly, he would finally be in a position to increase the level of awareness among his colleagues in the Cabinet as to the problems, needs, and interests of small business.

Further, the establishment of the Small Business Economic Council will reinforce the Administrator's role as a primary decision-maker. Such a Council would require that key members of the government, such as the Secretaries of the Treasury, Commerce, Labor, Agriculture, the SEC, and the FTC, and the Chairmen of the CEA and the Federal Reserve Board meet with the Administrator solely to discuss small business concerns. The Council would give the Administrator muchneeded close contact with the President's chief economic interests of small business. Cabinet rank for the SBA Adminstrator and the creation of the Council will go far towards insuring that small business is never again overlooked by the Federal government.

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