Published in The Hill's Congress Blog
Regulations require regular review. When I talk with business owners in Maine and elsewhere, the single most cited barrier to job growth is the uncertainty about federal regulations. The cost of ensuring compliance with the evermore complex web of mandates and regulations is choking employers’ ability to innovate and create jobs. Regulators owe it to all Americans to ensure the rules and regulations they enforce are efficient, effective, and meeting their goals in the best way possible. That is why all federal regulations need thoughtful and regular review. Unfortunately, too few regulations receive such attention.
That is why I joined with Sen. Tom Coburn (R-Okla.) to introduce the Small Business Regulatory Freedom Act. This would require common-sense regulatory reform to help ensure that small business concerns are taken into consideration when Federal agencies promulgate or review regulations.
Too often, new regulations are piled on top of existing regulations without substantial consideration of the impact on those who will have to comply. Already, the cost of federal regulations in the United States is estimated at $1.75 trillion annually (Crain & Crain, Sept. 2008).
Critics of regulatory reform cite an Office of Management and Budget report as demonstrating the cost to be much smaller. At best, that argument falls under the apples/oranges category. The Congressional Research Service looked at the disparity between the Crain report and OMB’s estimate and found Crain’s “estimates attempt to measure the cumulative costs of all rules. OMB’s estimates included only major rules that met certain criteria that had been issued during a 10-year period.” The OMB report also fails to include any compliance costs associated with the Federal Communications Commission or paperwork associated with the Internal Revenue Service.
The Snowe-Coburn regulatory amendment to the SBIR/STTR reauthorization bill, would strengthen the Regulatory Flexibility Act (RFA), the seminal legislation enacted in 1980 requiring federal agencies to conduct small business analyses for any regulation that would impose a significant impact on a substantial number of small firms.
Among many provisions, the amendment would:
(a) require that agencies consider indirect economic impacts in small business analyses;
(b) enforce existing periodic rule review requirements and penalize agencies that refuse to conduct these reviews;
(c) add nine new small business review panels at federal agencies whose rules have the largest economic impact on small businesses;
and (d) extend the RFA to agency guidance documents, so that federal agencies must conduct small business economic analyses before publishing those documents. Recently, agencies have subverted the rulemaking process by relying on documents that agencies can issue without having to adhere to their RFA obligations.
Our amendment incorporates ideas supported by Republicans and Democrats, and will achieve our shared goal of reducing the regulatory burden faced by job creators. For instance, the language requiring the consideration of the indirect economic effects of certain rules on small businesses was taken directly from the president’s chief small business regulatory appointee; a provision allowing for judicial review earlier in the rulemaking process was also used in a previous Landrieu-Cardin bill; and the offsets come from program eliminations originally called for by the presidentially appointed SBA Inspector General and in the president’s FY 2012 budget.
This amendment should be provided its due consideration during Senate debate of the SBIR/STTR reauthorization bill, which has been dubbed a “small business jobs bill.” If the majority is serious about turning the tide on anemic job creation, they will permit a vote on our critical regulatory reform amendment, which is vital to the prosperity of our nation’s almost 28 million small businesses job generators. Moreover, to prevent a vote on this amendment under the guise that it is non-germane to the underlying bill ignores well-established Senate procedure giving Senators the right to offer amendments, germane or not, prior to cloture being invoked.
It is wrong to imply that mitigating the effects of inefficient or ineffective regulations on small businesses necessitates our rolling back of regulations that protect the environment, consumers, or worker safety. These shared goals are not mutually exclusive.
Regular review is a critical tool to assist small business job creation across our nation, and legislation requiring this should be allowed its due consideration on the Senate floor. American families, small businesses and our overall economy can ill afford to continue to defer meaningful regulatory reform to yet another day.