December 10, 2011 at 10:59 a.m.
House regs bill could help small businesses step on the gas
For years, small-business owners pleaded with Washington to reduce regulatory confusion and make rules more transparent. Research by both the National Federation of Independent Business and Gallup found that government regulations are causing the biggest bottlenecks small businesses face today.
Greater clarity and certainty could go a long way towards helping owners pull the nation out of its economic ditch and crank up meaningful job creation. But more often than not, government agencies create one-size-fits-all mandates that do more harm than good, ignoring Congress' intention when it passed the Regulatory Flexibility Act over three decades ago.
America's regressive regulatory process is not just discouraging and unmanageable for Main Street entrepreneurs, it's costly too. Small businesses spend 36 percent more per employee per year to comply with federal rules and regulations than larger businesses, reports the U.S. Small Business Administration, whose research determined that the smallest firms cough up an estimated $10,585 for each worker annually.
But an opportunity to clean up the mess is coming. Congress is now considering legislation to provide a sensible approach to rule-making.
The bill, dubbed the Regulatory Flexibility Improvements Act, H.R. 527, has already passed with bipartisan support in the U.S. House of Representatives, and the Senate is expected to consider similar legislation soon. It would strengthen the process by making federal agencies conduct thorough studies of requirements to determine the economic burden they might dump on small firms. And, the bill would require all agencies to assemble Small Business Advocacy Review panels to help bureaucrats specifically understand how the regulations they craft affect small businesses. In addition, the measure would give SBA's advocacy office authority to set firm standards for flexibility analysis.
As with each important legislative initiative, support strongly depends on the grassroots backing from folks back home. This offers an essential moment for owners and their employees to personally inform their representatives of the importance of this bill. NFIB has alerted Capitol Hill lawmakers that their decisions will be recorded as small-business key votes and fully communicated to voters in each congressional district.
There are few issues on which all members of Congress can agree these days, but helping jump-start small business' ability to grow and create jobs is one that should have no opposition. Passing H.R. 527 would sweep aside long-standing regulatory barriers that are keeping America's free enterprise machine in low gear and send a signal that Washington values the economic contributions of small business.
Dan Danner is president and CEO of the National Federation of Independent Business, which represents 350,000 small-business owners in Washington, D.C. and every state capital.
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