Measure offers promise to clean up regulatory mess

While creeping along in holiday traffic on the way to grandma’s house for the holidays, take comfort that despite detours and fender benders, you’ll eventually get there. For millions of American small business owners, arrival at their final destination — success — is not assured. The way is often blocked by complex federal regulations and cordoned off with red tape.

Dan Danner

For years, small business owners have pleaded with Washington to reduce regulatory confusion and make rules more transparent. Research by both the National Federation of Independent Business (NFIB) and Gallup found that government regulations cause 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 congressional intention when Congress passed the Regulatory Flexibility Act more than 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 the smallest firms pay 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 measure, dubbed the Regulatory Flexibility Improvements Act, has already passed with bipartisan support in the House of Representatives. The Senate is expected to consider similar legislation soon.

The measure would strengthen the process by making federal agencies conduct thorough studies of requirements to determine the economic burden they might dump on small firms. Moreover, 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 the SBA Office of Advocacy 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 small business owners and their employees to personally inform their representatives of the importance of this bill.

For its part, the NFIB has alerted lawmakers their decisions will be recorded as small business key votes and 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 present no opposition. Passing the Regulatory Flexibility Improvements Act would sweep aside long-standing regulatory barriers that keep America’s free enterprise machine in low gear and send a signal that Washington values the economic contributions of small business.