119-HR-2965 Investigative Journalist Impact Analysis

Summary

• What the bill does: Sets a zero small‑business regulatory budget for SBA rulemakings starting FY2026 and orders the Office of Advocacy to report each agency’s total small‑business regulatory budgets annually; authorizes no new funds. [1]Congress.gov (Library of Congress) — Text - H.R.2965 - 119th Congress (2025-202…
• Where it stands (as of December 2, 2025): Placed on Union Calendar No. 82; a closed rule for House consideration was reported on December 1, 2025 (H. Res. 916). [1]Congress.gov (Library of Congress) — Text - H.R.2965 - 119th Congress (2025-202…[5]Congress.gov (Library of Congress) — All Info - H.Res. 916 (119th): House rule…
• Signal vs. substance: Because SBA rarely drives the largest, economy‑wide regulatory costs outside emergencies (e.g., COVID‑era PPP rules), near‑term economic effects likely stem from internal constraints at SBA and new cross‑government measurement demands. [2]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…
• Key risk: A hard zero‑cost cap may chill SBA rules that would add compliance steps to deter fraud or improve program access, despite potential net social benefits—especially given pandemic-era evidence on fraud risks in SBA programs. [6]U.S. Small Business Administration, Office of Inspector General — SBA OIG Repor…[3]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…

Economic Effects

Direct effects center on SBA’s own rulemaking constraints and on the Office of Advocacy’s new cross‑agency accounting task.

• Direct compliance cost constraint at SBA: New or amended SBA rules that impose any positive net compliance costs on small businesses would require equal or greater offsets within SBA to keep the budget at zero. This likely trims incremental SBA‑specific burdens but could also delay rules if offsets are uncertain. [1]Congress.gov (Library of Congress) — Text - H.R.2965 - 119th Congress (2025-202…
• Scale/context: OMB’s FY2023 accounting shows federal rules with monetized benefits exceeding costs overall; SBA is not a frequent source of the highest‑cost rules outside the pandemic period when PPP/EIDL interim final rules dominated SBA activity. Hence, macroeconomic effects from the cap itself are likely limited. [3]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…[2]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…
• Administrative costs and capacity: Advocacy must compile agency‑level totals of “small business regulatory budgets” annually with no new funding, implying reallocation from existing RFA oversight and outreach functions (comment letters, roundtables, SBREFA participation). Potential opportunity costs include fewer interventions that Advocacy says have yielded measurable cost savings. [1]Congress.gov (Library of Congress) — Text - H.R.2965 - 119th Congress (2025-202…[8]U.S. Small Business Administration, Office of Advocacy — Report on the Regulato…[4]Congressional Research Service via Congress.gov — CRS Insight: Small Business A…
• Capital access and program rules: SBA lending/contracting rules (e.g., size standards, 7(a)/504 program integrity, 8(a) program adjustments) sometimes add compliance costs to reduce fraud or improve equity. A zero‑cost cap may constrain such updates, affecting credit allocation and procurement participation if safeguards can’t be implemented without offsets. [2]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…
• Fraud‑prevention trade‑off: Pandemic oversight evidence indicates large fraud exposure in PPP/EIDL; GAO also notes SBA’s lower internal fraud estimate (≈$36B) versus OIG’s ≈$200B, highlighting contested measurement. A rigid cap could make it harder to adopt preventive controls that impose modest costs but avert losses. [6]U.S. Small Business Administration, Office of Inspector General — SBA OIG Repor…[9]U.S. Government Accountability Office — GAO-25-107267: COVID-19 Relief—Improved…

Social Effects

• Small firms’ administrative burden: If effective, the cap reduces incremental SBA‑originated compliance requirements (forms, attestations, certification steps), marginally lowering time costs for owners and managers. Magnitude uncertain given SBA’s typical rule footprint. [2]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…
• Program integrity vs. access: Rules that tighten eligibility/documentation can deter fraud but also raise barriers for legitimate firms with fewer resources. With PPP/EIDL as backdrop, the zero‑cost constraint could deter or slow such rules, shifting risks toward improper payments or, conversely, preserving access by avoiding new hurdles. [6]U.S. Small Business Administration, Office of Inspector General — SBA OIG Repor…
• Equity programs: SBA’s procurement rules (e.g., 8(a) program updates, mentor‑protégé consolidation) involve targeted stakeholder engagement and may carry compliance costs; a zero‑budget may delay changes intended to expand fair access if offsets are not identified. [2]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…

Environmental Effects

• Direct environmental impacts are minimal: SBA is not an environmental regulator, and H.R. 2965 imposes no constraints on EPA, DOE, or DOT rulemaking. The only cross‑agency element is reporting by Advocacy. [1]Congress.gov (Library of Congress) — Text - H.R.2965 - 119th Congress (2025-202…
• Indirect pathway: If Advocacy’s new reports reframe policy debates around small‑business compliance burdens, future legislation or EOs could leverage these data to press for offsets at other agencies, potentially affecting environmental rule design; this bill alone does not do so. [1]Congress.gov (Library of Congress) — Text - H.R.2965 - 119th Congress (2025-202…

Temporal Analysis

• Immediate (FY2025–FY2026): Advocacy must deliver the first cross‑agency report within 60 days after FY2025; SBA must plan offsets for any FY2026 rules expected to impose costs on small firms. Expect internal process changes and possible rule timing shifts. [1]Congress.gov (Library of Congress) — Text - H.R.2965 - 119th Congress (2025-202…
• Medium term (2–3 years): Methodology standardization (what counts as “cost to a small business,” treatment of paperwork vs. capital costs, allocation across firm sizes) will shape outcomes more than statutory language; without guidance, interagency inconsistencies are likely. OMB’s own reporting underscores persistent data gaps. [3]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…
• Long term (beyond 3 years): Depending on perceived usefulness of Advocacy’s budgets, Congress or the Executive could extend caps beyond SBA, amplifying effects; conversely, if estimates prove unreliable, the reporting may have limited policy traction. Evidence from prior “regulatory budgeting” efforts (e.g., EO 13771) suggests mixed, often procedural impacts. [7]U.S. Government Accountability Office — Federal Rulemaking: Deregulatory Execut…

Unintended Consequences

• Estimation gaming and disputes: Agencies could understate small‑business costs or overstate offsets to hit zero; GAO found deregulatory directives under EO 13771 altered labeling more than substance at some agencies, foreshadowing strategic behavior. [7]U.S. Government Accountability Office — Federal Rulemaking: Deregulatory Execut…
• Benefits blindness: A hard cost cap does not weigh benefits; OMB’s FY2023 totals show monetized benefits exceeding costs for rules with quantified effects, so some positive‑net‑benefit SBA rules may be chilled if they raise small‑business costs without identifiable offsets. [3]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…
• Crowd‑out at Advocacy: With no new funds, building and defending small‑business cost ledgers for every agency could divert staff from RFA letters, SBREFA participation, and outreach that Advocacy credits with tangible savings. [1]Congress.gov (Library of Congress) — Text - H.R.2965 - 119th Congress (2025-202…[8]U.S. Small Business Administration, Office of Advocacy — Report on the Regulato…[4]Congressional Research Service via Congress.gov — CRS Insight: Small Business A…
• Program‑integrity risk: If zero‑budget discipline deters added verification or documentation in SBA loan/contract programs, improper payments and fraud exposure could persist—an issue highlighted by OIG/GAO post‑pandemic reviews. [6]U.S. Small Business Administration, Office of Inspector General — SBA OIG Repor…[10]U.S. Government Accountability Office — GAO-23-105331: COVID Relief—Fraud Schem…

Assessment

Overall stance: Neutral. The bill’s direct economic footprint is likely modest because it targets SBA rulemaking rather than the high‑cost rule drivers elsewhere in government. Its net effect hinges on (1) whether SBA identifies credible intra‑agency offsets to avoid chilling beneficial rules, and (2) whether Advocacy can produce defensible, comparable small‑business cost accounts across agencies without new resources. Evidence points to real measurement challenges and fraud‑prevention trade‑offs that require careful implementation rather than categorical judgments. [3]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…[7]U.S. Government Accountability Office — Federal Rulemaking: Deregulatory Execut…[6]U.S. Small Business Administration, Office of Inspector General — SBA OIG Repor…

Sourcing notes

• Primary legal text and status from Congress.gov; Rules Committee materials for floor consideration. [1]Congress.gov (Library of Congress) — Text - H.R.2965 - 119th Congress (2025-202…[5]Congress.gov (Library of Congress) — All Info - H.Res. 916 (119th): House rule…
• OMB benefit‑cost reports (FY2020–2022; FY2023) for aggregate effects and methodological caveats. [2]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…[3]OMB, Office of Information and Regulatory Affairs (White House Archives) — Repo…
• SBA Office of Advocacy reports and CRS Insight for Advocacy’s statutory role and claimed cost savings. [8]U.S. Small Business Administration, Office of Advocacy — Report on the Regulato…[4]Congressional Research Service via Congress.gov — CRS Insight: Small Business A…
• GAO analyses of deregulatory EOs for lessons on measurement and behavioral responses. [7]U.S. Government Accountability Office — Federal Rulemaking: Deregulatory Execut…
• SBA OIG and GAO pandemic‑fraud work to illuminate program‑integrity trade‑offs. [6]U.S. Small Business Administration, Office of Inspector General — SBA OIG Repor…[10]U.S. Government Accountability Office — GAO-23-105331: COVID Relief—Fraud Schem…