House Committee on Small Business, Republicans

Straight Talk: Reduce Red Tape and Free Up the Economy

Weekly Update from Sam

Dear Friends,

Regulations cost time and money. Small business owners tell us this constantly. Excessive regulations are one of their major hurdles to growth and hiring. While small business owners know this from real-world experience, statistics back them up. Mounting regulations total 80,000 new pages a year. That led House Republicans to a simple solution. Let’s just call time out. Press pause. Let the economy recover.

So the House of Representatives did just that, voting to call a halt to all non-emergency regulations until the unemployment rate is back down to 6 percent. It’s a great idea. The unemployment rate has been at least 8 percent for 41 straight weeks. If the Senate joins us to take a break from new regulations, this step will genuinely help small businesses. In a recent survey, 78 percent of owners of small firms said the tax and regulatory burden makes it harder to hire. The burden of regulatory costs on small firms is 36 percent higher than on larger businesses. It makes sense. Bigger businesses are more likely to be better equipped with expert staff and lawyers that cut through red tape. Small business owners are often going it alone, and it’s a massive drain on their time and budgets.

When owners invest in their small businesses, it stimulates the economy more than the federal government ever could. Keep telling us about the businesses you’ve built right here at our Small Biz Open Mic.

(signed)
Sam Graves
Chairman

Latest Committee Action

On Wednesday, a Committee hearing highlighted successful small business strategies in a recession. Despite the tough economy, some small businesses have survival strategies well worth sharing. The Committee examined their business models and adaptability during the recession. Small firms – still our chief job creators – were hit hard during the economic downturn, and continue to face significant challenges in the sluggish economy. In the recession of 2007-2009, 40 percent of the overall jobs lost were from small businesses. This contrasts with just 10 percent in the 2001 economic setback. Small business owners described their best practices to the Committee, including reducing costs, diversifying portfolios, capitalizing on emerging industries and fostering innovation.

On Thursday, the Small Business Subcommittee on Agriculture, Energy and Trade held a hearing on the impact of foreign trade practices that are harmful to family farms. Some foreign markets are known to misuse non-tariff food requirements intended to protect health and safety, known as sanitary and phytosanitary measures. Nations can rightly ban products that are unsafe, but in too many instances foreign nations have wrongly used these measures to merely gain an unfair competitive advantage for their own agriculture industries, despite trade agreements.

In Their Own Words

Small business owners all over America are speaking up at our Small Biz Open Mic:

"Regulation that forces us to pay federal and state payroll taxes every two weeks is killing us. We work with large corporations and state and municipal governments. It’s the rare case when I can get paid every ten days even at a discount. It’s more likely payment is received within 30 - 45 days. Therefore, I eat up much needed cash flow to pay tax while I wait for customers to pay. We've wanted to add jobs for some time, but this mismatch holds us back." – Carmen Barker Lemay (Minneapolis, MN) Integrative Growth, Inc., July, 2012

“This is the worst time to put this kind of [tax] pressure on any small business. If the government is trying to reduce hiring and to reduce the number of small businesses then they are on target. If they wish to grow employment and increase the tax base then they are way off target." – Steve Woodall (Houston, TX) Reliant Business Products July, 2012

News From Washington

This was a busy and effective week in the House of Representatives. A real highlight, already mentioned, was Thursday’s vote 245-172 for the Red Tape Reduction and Small Business Job Creation Act, H.R. 4078. It’s time for a time out on new regulations until the job market recovers. Also significant, the House passed by a vote of 327-98 the Federal Reserve Transparency Act, H.R. 459, better known by the slogan, “Audit the Fed.” The bill would require a one-time audit by the Government Accountability Office (GAO), the government’s non-partisan watchdog agency, within a year of the law taking effect.

Finally, since most family farms are small businesses, we supported the Preserving America's Family Farms Act, H.R. 4157, which passed by voice vote. The bill was introduced in response to a Department of Labor regulation, since rescinded, that would have prevented youths in farm families from doing farm work, a long tradition and necessity in agricultural communities. In February, the Subcommittee on Agriculture, Energy and Trade held a hearing to examine the rule limiting youth from working on farms and ranches.

July 27, 2012