Marcella LeBeau Recognition Act

— 684 — Mandate for Leadership: The Conservative Promise l Establishes a Minority Business Advisory Council to advise the Under Secretary on supporting minority-owned businesses. MBDA was established in 1969 by President Richard Nixon under Executive Order 114584 as the Office of Minority Business Enterprise and the Advisory Council for Minority Business Enterprise. Its purpose was to strengthen and preserve minority business enterprises (MBEs) and to coordinate among MBEs and other groups such as state and local governments and trade asso- ciations. For over 50 years, the MBDA operated under executive order without clear congressional authorization, but was regularly recognized and promoted by every subsequent president, including Presidents Ronald Reagan and Donald Trump.5 MBDA has the appearance, on its face, of perpetuating racial bias by focusing on minority advancement rather than economic need or other criteria. This is why the Trump Administration proposed eliminating funding for the agency in 2017. Many conservatives ask why the government is funding this activity, which often amounts to business and management consulting services offered by private sector entities. Eventually, the Trump Administration changed course and pro- posed that MBDA continue to exist as a permanently authorized entity focused on policy rather than offering services. Despite this change, many conservatives understandably see MBDA as problematic on a philosophical level. Nonetheless, Congress has spoken recently on this issue and is unlikely to change its position in the near term. In 2017, MBEs represented one-third of all U.S.-owned businesses, with almost 9 million employees, generating $1.7 trillion for the U.S. economy.6 As such, a conservative Administration is best served by approaching MBDA as a tool to be leveraged in the fight to deliver economic oppor- tunity to all Americans and to produce an economy centered on equal opportunity, free markets, innovation, and growth. Conservative leadership at MBDA should focus the organization on: l Conducting policy analysis on the benefit of free markets, the evils of socialism and Communism, and the destructive effect of taxes and regulations on minority businesses; l Ensuring MBDA business centers operate efficiently with strict oversight of funding, clear metrics for success, and consequences for poor performance; l Creating policy-level operational priorities geared toward private sector action over government action with public–private partnerships serving as a necessary middle ground; — 685 — Department of Commerce l Establishing MBDA as a data and research clearinghouse for minority business enterprises and policymakers; l Coordinating amongst Cabinet agencies, state and local government, and trade associations to best leverage resources and encourage growth and innovation; and l Evaluating the harmful effects of unfair trade practices on minority-owned businesses and their employees. U.S. PATENT AND TRADEMARK OFFICE The U.S. Patent and Trademark Office carries out a core constitutional man- date from Section 8, Article 1: “The Congress shall have Power...[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discover- ies.” Strong intellectual property (IP) protections form the bedrock of American business and are a key factor in making the U.S. economy the most innovative in the world. As such, a conservative Administration must constantly work to strengthen IP rights and combat the incorrect view that strong IP rights some- how limit innovation. Political leadership in a new conservative Administration should: l Support like-minded countries as candidates for leadership in the World Intellectual Property Organization and build strong relationships with international partners to strengthen intellectual property rights. l Re-examine patent eligibility requirements in Section 101 of the Patent Act7 and support internal and/or legislative reforms to enable U.S. leadership in critical and emerging technologies such as quantum computing, 5G, and artificial intelligence. l Take a balanced approach to the Patent Trial and Appeal Board and prioritize rapid and transparent processing of applications and appeals. l Work with Administration partners and Congress to find and punish trademark infringers and counterfeiters. l Oppose efforts to provide intellectual property waivers for cutting-edge technologies, including for COVID-19 vaccines and therapeutics, through the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights agreement or any other mechanism.

— 760 — Mandate for Leadership: The Conservative Promise ENDNOTES 1. H.R. 7953, Small Business Act, Public Law 85-536, 85th Congress, July 18, 1958, § 2, https://uscode.ecfr.io/ statutes/pl/85/536.pdf (accessed February 17, 2023), amended by H.R. 4877, One Stop Shop for Small Business Compliance Act of 2021, Public Law 117-188, 117th Congress, October 20, 2022, https://www.congress. gov/117/plaws/publ188/PLAW-117publ188.pdf (accessed February 17, 2023). 2. U.S. Small Business Administration, “About SBA: Organization: Mission,” https://www.sba.gov/about-sba/ organization (accessed February 19, 2023). 3. Michael Faulkender, Robert Jackman, and Stephen I. Miran, “The Job-Preservation Effects of Paycheck Protection Program Loans,” U.S. Department of the Treasury, Office of Economic Policy, Working Paper No. 2020-01, December 2020, p. 9, https://home.treasury.gov/system/files/226/Job-Preservation-Effects- Paycheck-Protection-Program-Loans.pdf (accessed February 16, 2023). 4. Kate Rogers, Scott Zamost, Karina Hernandez, and Jennifer Schlesinger, “As Pandemic Aid Was Rushed to Main Street, Criminals Seized on Covid Relief Programs,” CNBC, April 15, 2021, https://www.cnbc. com/2021/04/15/as-pandemic-aid-was-rushed-to-main-street-criminals-seized-on-ppp-eidl-.html (accessed February 16, 2023). 5. Kevin Brewer, “Bills Extend Statute of Limitation for Prosecuting PPP, EIDL Fraud,” Journal of Accountancy, August 10, 2022, https://www.journalofaccountancy.com/news/2022/aug/bills-extend-statute-limitation- prosecuting-ppp-eidl-fraud.html (accessed February 16, 2023). 6. Sacha Pfeiffer, “Virtually All PPP Loans Have Been Forgiven with Limited Scrutiny,” NPR, October 12, 2022, https://www.npr.org/2022/10/12/1128207464/ppp-loans-loan-forgiveness-small-business#:~:text=As%20 COVID-19%20shutdowns%20threatened,early%20days%20of%20the%20pandemic (accessed February 16, 2023). 7. U.S. Small Business Administration, “About SBA: Organization: SBA History,” https://www.sba.gov/about-sba/ organization (accessed February 19, 2023). 8. President Richard Nixon, Executive Order 11518, “Providing for the Increased Representation of the Interests of Small Business Concerns Before Departments and Agencies of the United States Government,” March 20, 1970, in Federal Register, Vol. 35, No. 56 (March 21, 1970), pp. 4939–4940, https://tile.loc.gov/storage-services/ service/ll/fedreg/fr035/fr035056/fr035056.pdf (accessed February 18, 2023). 9. S. 3331, Small Business Amendments of 1974, Public Law 93-386, 93rd Congress, August 23, 1974, https://www. congress.gov/93/statute/STATUTE-88/STATUTE-88-Pg742.pdf (accessed February 19, 2023). 10. S. 299, Regulatory Flexibility Act, Public Law No. 96-354, 96th Congress, September 19, 1980, https://www. congress.gov/96/statute/STATUTE-94/STATUTE-94-Pg1164.pdf (accessed February 19, 2023). 11. Maeve P. Carey, “The Regulatory Flex Act: An Overview,” Congressional Research Service In Focus No. IF11900, August 16, 2021, https://crsreports.congress.gov/product/pdf/IF/IF11900 (accessed February 18, 2023). 12. U.S. Small Business Administration, Office of Advocacy, “The Regulatory Flexibility Act,” https://advocacy.sba. gov/resources/the-regulatory-flexibility-act/ (accessed February 18, 2023). 13. H.R. 644, Trade Facilitation and Trade Enforcement Act of 2015, Public Law No. 114-125, 114th Congress, February 24, 2026, https://www.congress.gov/114/statute/STATUTE-130/STATUTE-130-Pg122.pdf (accessed March 21, 2023). 14. U.S. Small Business Administration, Office of Advocacy, “Advocacy Releases Trade Report,” December 21, 2018, https://advocacy.sba.gov/2018/12/21/advocacy-releases-trade-report/ (accessed March 21, 2023). 15. Associated Press, “Reagan Offers $994-Billion ‘Hard-Choices’ 1987 Budget,” Los Angeles Times, February 5, 1986, http://www.latimes.com/archives/la-xpm-1986-02-05-mn-4369-story.html (accessed February 18, 2023). 16. Testimony of Hon. Hector V. Barreto, Administrator, Small Business Administration, in hearing, The President’s FY 2006 Budget Request for the Small Business Administration, Committee on Small Business and Entrepreneurship, U.S. Senate, 109th Congress, 1st Session, February 17, 2005, p. 8, https://books.google.com/ books?id=UwD-2ICa8k8C&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false (accessed February 18, 2023). See also Report No. 109-49, Summary of Legislative and Oversight Activities During the 108th Congress, Committee on Small Business and Entrepreneurship, U.S. Senate, 109th Congress, 1st Session, March 30, 2005, p. 21, https://www.congress.gov/109/crpt/srpt49/CRPT-109srpt49.pdf (accessed February 18, 2023). — 761 — Small Business Administration 17. Editorial, “The Small Business Administration Needs Reforming,” The Washington Post, December 18, 2016, https://www.washingtonpost.com/opinions/the-sba-needs-reforming/2016/12/18/b639fc4c-c159-11e6-8422- eac61c0ef74d_story.html (accessed February 18, 2023). 18. Robert Jay Dilger, Anthony A. Cilluffo, and R. Corinne Blackford, “Small Business Administration Funding: Overview and Recent Trends,” Congressional Research Service Report for Members and Committees of Congress No. R43486, updated July 14, 2022, Summary, https://sgp.fas.org/crs/misc/R43846.pdf (accessed November 18, 2022). 19. Ibid., p. 2. Emphasis added. 20. Press release, “SBA Announces End-of-Year Capital Benchmarks Showing Historic Support for Small Businesses Under Administrator Guzman,” U.S. Small Business Administration, December 13, 2022, https:// www.sba.gov/article/2022/dec/13/sba-announces-end-year-capital-benchmarks-showing-historic-support- small-businesses-under?utm_medium=email&utm_source=govdelivery (accessed February 18, 2023). 21. USASpending,gov, “Agency Profile: Small Business Administration (SBA),” data through September 29, 2022, https://www.usaspending.gov/agency/small-business-administration?fy=2022 (accessed February 18, 2023). 22. Testimony and prepared statement of Tad DeHaven, Budget Analyst, Cato Institute, in hearing, An Examination of SBA Programs: Eliminating Inefficiencies, Duplications, Fraud, and Abuse, Committee on Small Business and Entrepreneurship, U.S. Senate, 112th Congress, 1st Session, June 16, 2011, pp. 80–90, https://www. govinfo.gov/content/pkg/CHRG-112shrg88373/pdf/CHRG-112shrg88373.pdf (accessed February 18, 2023). 23. Sarah Westwood, “Feds Gave $400 Million in Contracts to Ineligible Firms,” Washington Examiner, September 28, 2014, https://www.washingtonexaminer.com/feds-gave-400-million-in-contracts-to-ineligible-firms (accessed February 18, 2023). 24. Keith Girard, “Inside the SBA’s Monumental Katrina Loan Scandal,” AllBusiness.com, https://www.allbusiness. com/inside-the-sbas-monumental-katrina-loan-scandal-11793824-1.html (accessed February 18, 2023). 25. Arnold & Porter, “CARES Act Fraud Tracker,” last updated January 2, 2023, https://www.arnoldporter.com/en/ general/cares-act-fraud-tracker (accessed February 18, 2023). 26. Jay Edwards, “Bipartisan Call to Crack Down on COVID-19 PPP/EIDL Fraud, Prosecute Fraudsters to the Fullest Extent of the Law,” WRNJ Radio (Hackettstown, New Jersey), October 21, 2022, https://wrnjradio.com/ bipartisan-call-to-crack-down-on-covid-19-ppp-eidl-fraud-prosecute-fraudsters-to-the-fullest-extent-of-the- law/ (accessed March 21, 2023). 27. See, for example, H.R. 7628, IMPROVE the SBA Act, 117th Congress, introduced April 28, 2022, https://www. congress.gov/117/bills/hr7628/BILLS-117hr7628ih.pdf (accessed February 18, 2023). 28. In varying degrees, almost every small-business advocacy organization and trade association engages with the SBA. During periods of hyper-regulatory activity fueled by an activist Administration, the small- business community engages more frequently with the Office of Advocacy through its roundtables and other mechanisms in the hope of warding off costly and intrusive rulemakings. A future conservative Administration can look to the following groups, among others, for support in advancing both SBA and broader policy reform: American Hotel and Lodging Association; Asian American Hotel Owners Association; Association of Builders and Contractors; Associated Equipment Distributors; Ceramic Tile Distributors Association; Consumer Technology Association; Family Business Coalition; Foodservice Equipment Distributors Association; Heating, Air-conditioning, and Refrigeration Distributors International; Independent Bakers Association; Independent Community Bankers Association; Independent Electrical Contractors’ International Association of Plastics Distributors; International Franchise Association; Metals Service Center Institute; National Association of Electrical Distributors; National Association of Manufacturers; National Association of Wholesaler-Distributors; National Fastener Distributors Association; National Marine Distributors Association; National Federation of Independent Business; National Ready Mix Concrete Association; National Small Business Association; Small Business and Entrepreneurship Council; and U.S. Hispanic Chamber of Commerce. Additionally, the small-business community is diverse and broad, and several key groups strongly support SBA lending but vigorously oppose tax, regulatory, and spending policies that are intrusiveness or costly to business. Conservative think tanks and taxpayer organizations like The Heritage Foundation, the Cato Institute, the National Taxpayers Union, Citizens Against Government Waste, the Taxpayers Protection Alliance, and Americans for Tax Reform (among others) also have a stake in an improved and cost-effective SBA.

— 74 — Mandate for Leadership: The Conservative Promise responsibility and improved management. It is essential that political executives build policy goals directly into employee appraisals both for mission success and for employees to know what is expected. Indistinguishable from their coworkers on paper, hard-working federal employees often go unrewarded for their efforts and are often the system’s greatest critics. Federal workers who are performing inadequately get neither the benefit of an honest appraisal nor clear guidance on how to improve. Political executives should take an active role in supervising per- formance appraisals of career staff, not unduly delegate this responsibility to senior career managers, and be willing to reward and support good performers. Merit Pay. Performance appraisal means little to daily operations if it is not tied directly to real consequences for success as well as failure. According to a survey of major U.S. private companies—which, unlike the federal government, also have a profit-and-loss evaluation—90 percent use a system of merit pay for performance based on some type of appraisal system. Despite early efforts to institute merit pay throughout the federal government, however, compensation is still based primarily on seniority rather than merit. Merit pay for executives and managers was part of the Carter reforms and was implemented early in the Reagan presidency. Beginning in the summer of 1982, the Reagan OPM entered 18 months of negotiations with House and Senate staff on extending merit pay to the entire workforce. Long and detailed talks between the OPM and both Democrats and Republicans in Congress ensued, and a final agreement was reached in 1983 that supposedly ensured the passage of legislation creating a new Performance Management and Recognition System (PMRS) for all, (not just management) GS-13 through GS-15 employees. Meanwhile, the OPM issued regulations to expand the role of performance related to pay throughout the entire workforce, but congressional allies of the employee unions, led by Representative Steny Hoyer (D) of government employee– rich Maryland, stoutly resisted this extension of pay-for-performance and, with strong union support, used the congressional appropriations process to block OPM administrative pay reforms. Bonuses for SES career employees survived, but per- formance appraisals became so high and widely distributed that there was little relationship between performance and remuneration. Ever since the original merit pay system for federal managers (GM-13 through GM-15 grade levels, just below the SES) was allowed to expire in September 1993, little to nothing has been done either to reinstate the federal merit pay program for managers or to distribute performance rating evaluations for the SES, much less to extend the program to the remainder of the workforce. A reform-friendly President and Congress might just provide the opportunity to create a more comprehensive performance plan; in the meantime, however, political executives should use exist- ing pay and especially fiscal awards strategically to reward good performance to the degree allowed by law. — 75 — Central Personnel Agencies: Managing the Bureaucracy Making the Appeals Process Work. The nonmilitary government dismissal rate is well below 1 percent, and no private-sector industry employee enjoys the job security that a federal employee enjoys. Both safety and justice demand that managers learn to act strategically to hire good and fire poor performers legally. The initial paperwork required to separate poor or abusive performers (when they are infrequently identified) is not overwhelming, and managers might be motivated to act if it were not for the appeals and enforcement processes. Formal appeal in the private sector is mostly a rather simple two-step process, but government unions and associations have been able to convince politicians to support a multiple and extensive appeals and enforcement process. As noted, there are multiple administrative appeals bodies. The FLRA, OSC, and EEOC have relatively narrow jurisdictions. Claims that an employee’s removal or disciplinary actions violate the terms of a collective bargaining agreement between an agency and a union are handled by the FLRA, employees who claim their removal was the result of discrimination can appeal to the EEOC, and employ- ees who believe their firing was retribution for being a whistleblower can go to the OSC. While the MSPB specializes in abuses of direct merit system issues, it can and does hear and review almost any of the matters heard by the other agencies. Cases involving race, gender, religion, age, pregnancy, disability, or national origin can be appealed to the EEOC or the MSPB—and in some cases to both—and to the OSC. This gives employees multiple opportunities to prove their cases, and while the EEOC, MSPB, FLRA, and OSC may all apply essentially the same burden of proof, the odds of success may be substantially different in each forum. In fact, forum shopping among them for a friendlier venue is a common practice, but fre- quent filers face no consequences for frivolous complaints. As a result, meritorious cases are frequently delayed, denying relief and justice to truly aggrieved individuals. The MSPB can and does handle all such matters, but it faces a backlog of an estimated 3,000 cases of people who were potentially wrongfully terminated or disciplined as far back as 2013. From 2017–2022 the MSPB lacked the quorum required to decide appeals. On the other hand, as of January 2023, the EEOC had a backlog of 42,000 cases. While federal employees win appeals relatively infrequently—MSPB adminis- trative judges have upheld agency decisions as much as 80 percent of the time—the real problem is the time and paperwork involved in the elaborate process that managers must undergo during appeals. This keeps even the best managers from bringing cases in all but the most egregious cases of poor performance or mis- conduct. As a result, the MSPB, EEOC, FLRA, and OSC likely see very few cases compared to the number of occurrences, and nonperformers continue to be paid and often are placed in nonwork positions. Having a choice of appeals is especially unique to the government. If lower-pri- ority issues were addressed in-house, serious adverse actions would be less subject