Regulatory Reform and Rollback: The Effects on Small Businesses
WASHINGTON—Today, Members of the House Committee on Small Business heard from a panel of stakeholders on the effects of Congress and the President’s regulatory reform and rollback efforts for small businesses and how to improve and lighten the regulatory burden.
“Small business owners must navigate what is often a tangled web of complex, confusing, and costly regulations. A start-up company will spend on average over $83,000 in regulatory costs alone in the first year. Small business owners also spend a substantial about of time with regulations, with nearly half of them spending over 40 hours every year to handle new and existing regulations,” said Chairman Steve Chabot (R-OH). “The evidence is clear: federal regulations continue to be a problem for America’s small business owners and needs to be addressed.”
Cutting Red Tape
Across every industry, small business owners continue to say that federal regulations are one of the top burdens they face as they spend a substantial amount of time trying not only to understand them, but adhere to them. The complexity of rules and difficulty understanding them are just the tip of the iceberg for many of America’s 29 million small businesses. In an effort to reduce the continuing burden, both Congress and President Trump have taken steps to reduce the regulatory burden on small businesses by rolling back and revising existing regulations.
“When it comes to regulations, small businesses bear a disproportionate amount of the regulatory burden. This is not surprising since it’s the small business owner, not one of a team of “compliance officers” who is charged with understanding new regulations, filling out required paperwork, and ensuring the business complies with new federal mandates,” stated Karen Harned, Executive Director of the Small Business Legal Center at the National Federation of Independent Business (NFIB) in Washington, DC. “In a Small Business Poll on regulations, NFIB found that almost half of small businesses surveyed viewed regulation as a ‘very serious’ (25 percent) or ‘somewhat serious’ (24 percent) problem.”
“Through the end of fiscal year 2017, the administration completed 67 actions classified as deregulatory, including rules without estimated annualized cost savings,” said Patrick Hedren, Vice President for Labor, Legal, and Regulatory Policy at the National Association of Manufacturers (NAM) in Washington DC. “While these numbers are dramatic, they do not indicate a slash-and-burn approach to deregulation. Instead, they indicate a more methodical approach taking place through the rulemaking process.”
“On the positive side, the successful efforts of this administration and Congress to reduce the regulatory burdens on small businesses in the home building industry are remarkable both in their number and scope,” implored Randy Noel, Chairman at the National Association of Home Builders (NAHB) in Washington DC. “To date, we have seen more than 20 significant regulatory changes that will benefit home owners, home buyers, and home builders.”
While it is clear that some regulation is necessary and can provide clear direction to small businesses when done responsibly, regulations can pile up and cost so much that it puts them out of business. Easing the regulatory burden on small businesses continues to be one of the top priorities of the Committee.
Words into Action
Earlier this Congress, Chairman Chabot introduced H.R. 33, the Small Business Regulatory Flexibility Improvements Act to force federal regulators to craft smarter, less burdensome regulations that take into consideration their direct and indirect economic effects on small businesses.