Your Man On The Hill Preach it, chairman! Senator Kit Bond doesn't just run the Committee on Small Business. He plays the bully pulpit for all it's worth. Agencies like the EPA and OSHA hear him--loud and clear.
(FORTUNE Small Business) – Sen. Kit Bond is smiling as sweat trickles down his cherubic face. It's June and pleasantly cool in the Bartle Hall Convention Center in downtown Kansas City, Mo., but Bond, 61, is just warming up. It's as though Kit Bond is a preacher and this rapt crowd his congregation. Here are the hosannas, the "Yeses" and "Uh-huhs," as Bond cranks it up. "You are the people who are the backbone of our neighborhoods and communities!" Bond bellows. "You work the 18-hour days! You put your life savings on the line! And you have become the economic engine that will lead us through the next century!" Amen!
As Bond sits down and dabs the perspiration off his face, he looks pleased. And he should be. At this National Women's Small Business Summit, a gathering convened in June by Bond in his role as chairman of the Senate Committee on Small Business, everyone's preaching his gospel. Here is an epistle from presidential candidate George W. Bush, proclaiming "less regulation, less litigation, and lower taxes." Here is New Jersey governor and Republican poster girl Christine Todd Whitman, bragging about her tax cuts. And here's the lone Clinton team representative--Aida Alvarez, head of the Small Business Administration (SBA)--complimenting Bond, whose committee polices her agency. Praise be!
In Kansas City, as with anywhere he goes, Bond isn't just paying lip service to the gospel of small business. Since he took the committee chairmanship five years ago, the Missouri Republican has become an unrelenting advocate for small business interests. He has also pulled off something many small businesses have long awaited: imposing a real protector on the dangerous world of federal regulators. A bill crafted by Bond--with the unsexy name of SBREFA, the Small Business Regulatory Enforcement Fairness Act of 1996--has some powerful government agencies scrambling to revise rules. And it's got the environmental and labor communities scratching their heads and biting their lips in frustration over small business' new clout.
It's not that the cause of small business lacks apostles in Washington. Bond has a forceful counterpart--also from Missouri--who heads the House committee, Rep. James Talent. Moreover, the mere phrase "small business" now shares a sacred status similar to other unassailables in political debate such as "Social Security" or "American taxpayer." In Washington, the needs of small business are issues everybody can agree on--or at least wants to be known for supporting. Almost half of Congress gets the NFIB's mark of approval, as a "guardian of small business." That's the National Federation of Independent Business, a lobbying group that ranks second in a Fortune survey of the capital's most powerful groups, tied with the National Rifle Association. No wonder measures for small business run through the legislative labyrinth with rare speed and unanimity.
But amidst this rising chorus, Bond has become the go-to guy on almost every issue. A classic mover and shaker, he's now one of small business' most powerful allies. In a bit of Washington irony, he occupies the Senate office once inhabited by another well-known Missourian, Harry S. Truman. If you close your eyes and sniff the rich scent of Bond's cigars that clings to the crimson-hued walls, you can imagine the man who became the 33rd President striking deals in this very room. Bond can even sound as folksy as Truman, dropping words like "highfalutin" into his conversation. But unlike Truman, who once ran a haberdashery, Bond has never run a business. He's a Princeton grad with a law degree from the University of Virginia. In fact, he pauses for a moment when asked to define a small business. "Oh, it's kind of in the eye of the beholder," Bond says. "You know it when you see it," he adds, playing on the famous Potter Stewart definition of obscenity.
But Bond doesn't need his own venture to earn the NFIB's 100% approval rating. Instead, he's an expert at the Beltway game. A pragmatic Republican, Bond is willing to work both sides of the aisle to make things happen. In 1993, he helped promote a substitute to Clinton's doomed health-care plan. He was the chief Republican sponsor of the Family and Medical Leave Act, a rare instance in which he parted ways with small business, which opposed it. Bond also favors more federal assistance for low-income housing. He created a program that encourages small businesses to locate in poor areas. And, of course, like any politician, Bond makes sure to bring home the bacon. In fact, a government watchdog group branded him with a "license to pork" last year for wangling more than $50 million in federal money. (Bond reportedly said he'd bring the barbecue sauce next time.) But he has also had more serious dustups, one over the Senate confirmation of a black judge from Missouri.
His most powerful position is in leading the low-key but astonishingly persuasive small business committee. "Just look at the structure of Congress," points out Doris Freedman of the National Commission on Entrepreneurship, a nonprofit research group. "It's unbelievable that almost a full fifth of the Senate is involved in the small business committee," she says. "No other agency with a budget that small--the SBA had $873.7 million last year--has two full committees dedicated to looking at it."
The committee's narrow charge gives Bond a wide berth. There's Bond the legislator; his committee spawned six laws this session. There's Bond the listener, holding hearings and roundtables. And there's Bond the edgy watchdog, blasting off endless letters aimed at keeping federal agencies' feet to the fire. Bond has pressed SBA chief Alvarez at every opportunity--mostly the normal jousting at a Democratic Administration. A recent sampling of his reproofs: distribution of grants, a lack of data on federal contract bundling, and Alvarez' busy travel schedule (except, we assume, her trip to Kansas City).
Most important, there's Bond the meddler, butting his nose into issues other committees are debating. "We've become known as officious intermeddlers," Bond says with a laugh. "We say, 'Time out! This is going to affect small business.' There are certain committees that really don't like to see us coming." The biggest arm in Bond's arsenal is also his defining achievement: a bill that gives small businesses extraordinary new leverage in dealing with the government, especially with business' conventional whipping boys, the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA).
This part of the story goes back to 1996, when Newt Gingrich's troops had ousted the longtime Democratic Congress. Partisanship raged, except in one instance--SBREFA. Bond doesn't get all the credit for this reform. The idea had been born at a White House conference the year before, but it was now "Bond's baby," as one lobbyist puts it. Aimed at getting the federal government off the backs of small business, the bill sped through both houses, to be blessed by Clinton. Everyone in Congress wanted a seat on the small business train. But Bond was the one stoking the boiler. "We worked many, many months before we brought SBREFA to the floor," he explains. "I thought we were going to have a lot of fights. But we had worked so long with our Democrats, with our agencies, that people just came down and said, 'Sign me on.'"
Despite its big Beltway MEGO ("my eyes glaze over") factor, SBREFA is a pretty radical piece of work. Small business has had a unique patron since 1976: the SBA's Office of Advocacy, which can testify against Administration actions and file "friend of the court" briefs. Still, despite regulatory relief that goes back to 1980, the advocacy office had been largely toothless.
The new law puts fangs into the concept of giving smaller entities, nonprofits and local governments as well as small businesses, a break. For most agencies, that means they must consider--in the very process of rulemaking--how rules would affect these groups, and find reasonable compromises. In the case of the EPA and OSHA, it goes further, requiring that special SBA panels (including small business representatives) review proposed rules. SBREFA also established an SBA ombudsman to deal with gripes once regulators go out in the field to enforce the rules. But the real bite is that the law gives outraged parties as much as one year to sue if they still think they're getting a raw deal.
Since 1996, there have been 14 court decisions in challenges against agencies. A few have been successful, including a case brought by a mining firm against the Bureau of Land Management. The court told the bureau to scrap the regulation under contention and ordered it to pay the mining firm's lawyer fees and court costs. The bureau says it is reworking the rules; this time it has posted a working draft on its site, seeking input.
Four years after the SBREFA's enactment, its power is just beginning to hit home. "It has made agencies more careful," says Susan Eckerly, chief Senate lobbyist for the NFIB. The SBA agrees. The act has had a "major impact on the regulatory culture," in large part, says the SBA, because the threat of litigation has gotten regulators' attention. An SBA list shows 16 rule changes last year that the SBA says saved small business $5.3 billion. They range from dropping a hazardous solvent prohibition for 1,700 industrial laundries to lifting a scallop-fishing embargo on the Georges Bank off the coast of Cape Cod, Mass.
OSHA recently lost a major round with Bond and SBREFA. OSHA had written 600 pages of ergonomics rules aimed at preventing injuries from repetitive motions such as keyboard or meat-packing work. As ordered by SBREFA, OSHA convened the required small business panel. When the panel said that small companies would have to spend more time and money complying with these rules than OSHA claimed, the agency suggested a "quick fix" punch list especially for small business. The ergo-nots felt that this didn't really address their complaints. But at that moment, the panel seemed to be "just a speed bump to get past in pursuit of the regulation," one Senate staffer complains. Bond argued that OSHA's solutions weren't proven enough to ward off injuries; he wasn't going to let the agency drive on. "What OSHA has created is a catch-22," he claims. OSHA doesn't really tell you how to prevent injuries, he says, "but if you [end up with] an ergonomics injury, you're dead meat." In this case, it was OSHA's rule that became road kill: This summer, Bond and others stripped OSHA of its funding to pursue ergonomics rules, sending the regulations into a stall.
No surprise, then, that the biggest measure of the Bond Effect is the reaction of groups that look kindly on the EPA and OSHA. Sure, this is good for small business, they argue, but what if your interest is clean air or clean water? Environmental and labor advocates sound incensed--and envious. "Why should small business be given a second cut at the rule in a separate venue?" asks a labor rep. "All the rest of us have only one forum--the rule-making comment period." That's special treatment, complains Deborah Weinstock, a lobbyist for the AFL-CIO. "We don't have workers on any of these panels."
Note to the union: Stay tuned for more. The NFIB has formed a legal foundation devoted to such actions and has already filed a suit under SBREFA challenging new procedures by the Army Corps of Engineers. The Corps is overhauling its system granting permits for discharges in wetlands. Permits are like rules, the NFIB argues on behalf of one member, a small builder; they should have the input of small business before they're issued.
Meanwhile, Bond is after perhaps the largest thorn in small business' side: the IRS. For years, the IRS has been free to issue "interpretative rules" that are largely exempt from public comment. Now the Senate has passed a Bond bill requiring the IRS, like EPA and OSHA, to convene special small business panels from the start--when it's making its rules. There's no guarantee this bill will end up on Clinton's desk or be signed. But the House is working on similar strictures for the IRS.
So does the Senator think running a small business could be as rewarding as politics? Maybe. Bond has mused about starting a venture when he retires (someday) to his hometown of Mexico, Mo. "I'm hoping to develop my chestnut orchard," he says. But when an agricultural expert came to survey the property, she wasn't optimistic. "You've got the wrong species of chestnut tree on the wrong ground," she told Bond. "What's she's trying to tell me," Bond says with a laugh, "is, 'Don't quit your day job.' " It seems that running a small business is always more difficult than at first glance. Bond's constituents could have told him that.