America’s small businesses are the way millions of families get ahead in life. Small businesses employ about half of all working Americans, and create 2 of every 3 new job opportunities.
These small businesses do their best to provide services to their communities and good wages for their employees. On average, however, they’re also shouldering a cost of about $11,000 per employee just to comply with federal regulations that they most likely had no say in formulating — despite laws requiring just that.
Since 1980, federal law has required agencies to determine the impact new rules have on small businesses and then consider the possibility of a less burdensome way forward. This good-government approach to rule-writing is often skirted out of convenience. Agencies often fail to assess the impacts of new rules on small businesses, neglect to consider more cost-effective ways of fulfilling their needs and do not solicit input from small businesses.
No one is suggesting we need a world without rules. We have to make sure the rules we have are helping more than they’re hurting.
Making smarter, less burdensome rules is a goal shared by Republicans and Democrats. In 2011, President Barack Obama said over-regulation “stifles innovation” and has a “chilling effect on growth and jobs.” He wrote to his administration he was “firmly committed to eliminating excessive and unjustified burdens on small businesses,” by “ensuring that regulations are designed with careful consideration of their effects.”
I hope Democrats agree this week, when the House votes on the Small Business Regulatory Flexibility Improvements Act of 2015. I introduced HR 527 with colleagues on the House Small Business and Judiciary committees to modernize and improve the rule-making process. HR 527 makes government more open and responsive by seeking small business input earlier in the process and asking agencies to do what they really should do: Look at direct impact as well as some of the most obvious indirect effects of a rule.
Here’s an example of the indirect effects we’re talking about. A rule increasing efficiency standards on dry-cleaning machines doesn’t just impact the manufacturer. It increases costs for the Main Street dry cleaner that relies on it, and for the customer who needs his or her clothes cleaned. It only makes sense that all of these should be considered, but it’s not usually the case.
This bill isn’t about getting rid of regulations. It’s about improving the relationship between the government and the people it serves.
In my years in Congress and on the Small Business Committee I am now chairman of, I’ve learned this: The challenges discussed in the conference rooms at small businesses are also talked about in the living rooms of the people who work there. We can lift up America’s working families by helping small businesses flourish, and that starts with freedom from overregulation and making our government accountable and responsive to its citizens. The Small Business Regulatory Flexibility Act is a bipartisan step toward that goal.
Rep. Steve Chabot, R-Ohio, is chairman of the House Small Business Committee.