What would you do if a report you funded was debunked by a scathing critique from the nonpartisan Congressional Research Service?  What if you found that the researchers you funded had based 70 percent of their analysis of the costs of regulation on a regression based on opinion polling data?  What if the researchers who had published that opinion polling insisted publicly that their data was never meant to be used for such purposes?  What if a member of Congress had publicly lambasted you for keeping the underlying data used in the study from being examined by the public?

For the Small Business Administration’s Office of Advocacy, the answer appears to be: Stay the Course.  In new research proposal requests I noticed recently posted on the SBA’s website, the SBA appears to have learned little.

The Office of Advocacy’s flawed report that got so …

Former Senator Blanche Lincoln, now heading the National Federation of Independent Business’s new anti-regulatory campaign, faced criticism in recent days for citing the debunked SBA study claiming regulations cost $1.75 trillion in a year. The NFIB used that stat last week in launching its campaign (see ThinkProgress), and Lincoln cited the number in a National Journal forum post on Monday:

While some federal regulations are important, it costs the U.S. economy a staggering $1.75 trillion a year to comply with them, according to a report commissioned by the Small Business Administration last September.

Two respondents on the forum, CPR President Rena Steinzor and Public Citizen President Robert Weissman, specifically criticized Lincoln’s use of the thoroughly debunked number. In a new post Wednesday, Lincoln didn’t mention “$1.75 trillion” but instead wrote:

Currently, federal regulations are draining nearly 12 percent of U …

The House Energy & Commerce sub-committee on Environment and the Economy held a hearing yesterday on “regulatory chaos” (yikes!). One figure seemed popular: $1.75 trillion. That’s how much regulations cost the U.S. economy each year, sub-committee vice-chair Tim Murphy said in his opening statement. Two of the four witnesses made the same claim in their testimony (William Kovacs of the Chamber of Commerce and Karen Harned of the National Federation of Independent Business). The committee’s briefing memo on the hearing featured, you guessed it, the same number.

The number, of course, comes from a September 2010 study sponsored by the Small Business Administration’s Office of Advocacy. In February, a CPR white paper showed that the SBA study was severely flawed. Most notably, more than 70 percent of the total cost estimated had been based on public opinion polling about the perceived regulatory …

In testimony before the Senate Committee on Homeland Security and Governmental Affairs in mid-April, Cass Sunstein, Administrator of the White House’s Office of Information and Regulatory Affairs (OIRA), was asked to comment on a much-disputed $1.75 trillion estimate of the annual cost of federal regulations. The number comes from a report commissioned by the Small Business Administration’s Office of Advocacy, often referred to as the Crain and Crain report, for its authors. The $1.75 trillion estimate is grossly at odds with OIRA’s own calculations, but it has been widely bandied about by anti-regulatory advocates on the Hill. Sunstein might well have been expected to knock the question out of the park back in April, but the bat never left his shoulder. “I haven’t studied that document with care,” he said (see 63:50 – 66:43 in the video archive of the …

It's their favorite figure: $1.75 Trillion. Repeated ad nauseam in congressional hearings by members of congress and expert witnesses alike, it is the supposed annual cost of regulations, this according to a study from last year commissioned by the Small Business Administration's Office of Advocacy. Sponsors of anti-regulatory legislation like the number: Olympia Snowe and Tom Coburn included it in the 'findings' of their bill, while Geoff Davis, chief sponsor of the REINS Act, cites it regularly. It's been used by John Boehner and Eric Cantor, and House committee chairs Fred Upton, Darrell Issa, Lamar Smith, and Sam Graves. Conservative think tanks like the Competitive Enterprise Institute and the Heritage Foundation are fond of it. A few Democrats have gotten in on the act, too: Mark Warner, proponent of his own anti-regulatory plan, has cited it, as has Nydia Velazquez, Ranking Member of the House Small …

Claudia Rodgers, Deputy Chief Council for the Office of Advocacy at the U.S. Small Business Administration, testified earlier this month at a hearing conducted by a House Oversight and Government Reform sub-committee. The session ("Assessing The Impact of Greenhouse Gas Regulations on Small Business") was a sparsely attended affair on all sides of the room. But something important happened.

Rep. Jackie Speier asked Rodgers a series of questions (at 1:03:30 in the video) about the Office of Advocacy’s oft-cited report from September, by economists Nicole Crain and Mark Crain, which claims that the cost of regulations in the U.S. in 2008 was $1.75 trillion dollars. Representative Speier cited CPR’s recent report debunking the study. In response, Rodgers mostly gave little new information, telling Speier she'd get back to her. But then there was this:

Rep. Speier:

... Ms. Rodgers, does your …

When the U.S. Small Business Administration issued a study last September claiming regulations cost the U.S. economy $1.75 Trillion in a single year, the agency trumpeted that the "report was peer reviewed consistent with the Office of Advocacy’s data quality guidelines."

But the peer review file included with the study was embarrassingly meager -- comments from all of two individuals. The authors, economists Nicole Crain and Mark Crain, ignored a fundamental criticism raised by one of the two reviewers that struck at the very heart of their estimates of economic regulatory costs. The second reviewer's complete comment had the sort of casual quality to it that suggested a somewhat less than thorough review. The review, in its entirety: “I looked it over and it's terrific, nothing to add. Congrats."

When CPR Member Scholars issued a report in February critiquing SBA's study, they …

Not to be outdone by the Small Business Administration’s aptly named Office of Advocacy, the Chamber of Commerce has issued its own breathless report on how many jobs we could save if we did away with environmental, land use, and utility regulations. Crunching a bunch of dubious numbers, the SBA Office of Advocacy’s consultants, Nicole and Mark Crain, claim that regulations cost $1.75 trillion a year, a number several of my CPR colleagues thoroughly debunked in a report issued in February. Undeterred and not to be outdone, the Chamber’s feverish Project No Project, released yesterday, claims that citizen opposition to polluting plants combined with “excessive” government permitting requirements to deny the economy a “$1.1 trillion short-term boost” and “1.9 million jobs annually.”

The premise of the Chamber’s report is that if busybody neighbors and fussy regulators would just get out …

Having voted to repeal health care legislation, House Republicans have now taken aim at government regulations, describing efforts to protect people and the environment as “job-killing.”  This claim conveniently papers over the fact that it was the lack of regulation of Wall Street that tanked the economy and caused the current downturn.  But nonetheless, seeking rhetorical points to boost their anti-regulations campaign, House Republicans are trumpeting a recent report, done for the Small Business Administration’s Office of Advocacy. The report, authored by Nicole Crain and Mark Crain, claims that regulation cost the U.S. economy $1.75 trillion dollars in 2008. Upon examination, it turns out that the estimate is the result of secret calculations, an unreliable methodology and a presentation calculated to mislead. 

Crain and Crain’s $1.75 trillion estimate is far larger than the estimate generated by the Office of Management and Budget …