Small-business owners remain under fire by federal regulators with more than 1,600 new rules issued this year and 4,000 more in the pipeline, says Dan Danner, CEO of the National Federation of Independent Business. “The regulatory onslaught has not slowed,” he told small-business owners and state officials Tuesday at NFIB-Ohio’s Small Business Day at the Capitol program in Columbus. “It’s an uphill battle, but a battle we all need to keep fighting.”
A Capital One survey of small business owners this week revealed that 67 percent of small businesses do not have plans to hire in the next six months. More than half (52 percent) of the small businesses surveyed report that current business conditions are fair or poor, while 46 percent report that business conditions are excellent or good.
A new formaldehyde emissions rule from the Environmental Protection Agency came under scrutiny again last week when White House documents revealed that the EPA’s benefit assessments of the rule had been overestimated by as much as $230 million. The report has raised troubling questions about the EPA’s ability to evaluate science and data accurately and objectively. Small Businesses for Sensible Regulations has called for principled regulatory reforms that will produce a consistent process to evaluate hard science and data.
President Obama’s nominee to head an obscure but powerful regulatory office on Wednesday promised to make scrapping burdensome rules a priority. Howard Shelanski’s testimony before the Senate Committee on Homeland Security and Governmental Affairs were his first public remarks since he was tapped in April to serve as administrator of the Office of Information and Regulatory Affairs (OIRA).
NFIB Michigan State Director, Charles Owens, in the Detroit News this week examined how small businesses in the recreation and hospitality industries are trying to figure out how to pay for a new mandates involving swimming pools and spas that took effect this year. According to Owens, a small water park or a motel with two pools will be forced to fork out $20,000 for two permanent lifts when one temporary lift would have achieved the same goal. Owens calls for reforms giving federal bureaucrats less discretion to impose rules that can kill honest businesses.
An editorial in the Wheeling News-Register noted that twelve percent of small businesses surveyed for NFIB’s monthly optimism index reduced headcount in May. The Register noted that small business owners already on the ropes, battling government regulation and skepticism about the truth of any economic recovery, have not felt the relief that Wall Streeters addicted to the Federal Reserve’s easy money policies have been enjoying.
A powerful Opinion Editorial from Niall Ferguson explored the related rise in red tape to the difficulty of doing business in America, particularly for small business owners. Ferguson notes, “Who benefits from the growth of complex and cumbersome regulation? The answer is: lawyers, not forgetting lobbyists and compliance departments. For complexity is not the friend of the little man. It is the friend of the deep pocket. It is the friend of cronyism.”
Despite claims from President Obama that his administration believes in a “light touch when it comes to regulations”, recent polls and economic indicators suggest that small business owners disagree.The National Federation of Independent Businesses small business optimism index released on Monday, listed respondents citing “regulations and red tape” as one of their top three business problems.Small business owners’ inability to plan due to regulatory uncertainty is having a paralytic effect on hiring and growth potential.
Small Businesses for Sensible Regulations coalition members frequently share with us their stories of the impact of increasingly burdensome federal regulations. One commonly raised concern is higher costs of regulatory compliance for small businesses compared to those of larger businesses.
Ty Baker-Baumann, owner of Rebsco, Inc. in Greenville, Ohio, explained her story of keeping up with regulatory compliance costs:
“In my community – small business, large business – I don’t know any of my customers who don’t want to be compliant, who don’t want to provide proper safety gear for their employees, who don’t want to train their people to be safe and train their people to be safe and work effectively. And yet, you’re constantly feeling like no matter what you do, it will never be good enough because the target is always moving.”
According to the federal Small Business Administration, small businesses bear a regulatory cost of $10,585 per employee, which is 36% higher than the cost of regulatory compliance for large businesses. Large businesses often have compliance staff and outside counsel to help them navigate new regulations, while for small businesses, the owner is often running the business while also handling necessary state and federal tax and regulatory paperwork.Polls show that businesses are keeping any extra revenue on the sidelines for fear of new mandates and resulting compliance costs. In addition to more public comment and greater transparency in the process, sensible regulatory reform at the federal level should include greater compliance assistance for small businesses and waiving fines or penalties for initial minor errors on regulatory paperwork.
NFIB’s Small Businesses for Sensible Regulations coalition remains focused on making sensible regulatory reforms a reality to protect small businesses and American jobs from the economic and other impacts of overly burdensome regulations.
The NFIB expressed strong support on Monday for an amendment from Senator Tom Coburn (R-OK) that helps American farmers and ranchers by expanding important regulatory impact analyses and outreach requirements to the U.S. Department of Agriculture.
This proposed Amendment to the Agriculture Reform, Food, and Jobs Act of 2013 (S.954), would ensure that when the USDA creates rules and regulations, they fully consider the economic impact that those rules and regulations would impose on our nation’s almost 30 million small farms. According to SBA research, small businesses bear a disproportionate burden, paying almost 45 percent more per employee in annual regulatory compliance than larger firms.
NFIB Senior Vice President of Public Policy, Susan Eckerly wrote, “Our farming members continually tell us about the difficulty and expense of complying with ever-increasing federal regulation. In fact, in our most recent Small Business Problems and Priorities, unreasonable government regulations ranked third out of 75 issues important to small businesses in the agriculture industry.”
NFIB and the Small Businesses for Sensible Regulations coalition encourage you to contact your U.S. Senator, and urge support for this important amendment to rein in unnecessarily burdensome regulations on the American agriculture community.
Among the priorities highlighted in the introductory chapters of President Obama’s proposed 2014 Budget is a commitment to “a regulatory strategy that protects the safety and health of all Americans, while promoting continued economic growth and job creation.” The Budget claims that by carefully weighing the costs and benefits of new rules, “the net benefits of regulations issued through the third fiscal year of the first term have exceeded $91 billion. This amount, including not only monetary savings, but also lives saved and injuries prevented, is over 25 times the net benefits through the third fiscal year of the previous Administration.”
Confidence among U.S. small businesses fell in March, the latest indication that economic activity lost momentum as the first quarter ended.
The National Federation of Independent Business said on Tuesday its optimism index fell 1.3 points to 89.5 last month. The overall tone of the survey was downbeat, with only two components of the index increasing.
Small business owners may have weathered the storm of the recession, but that doesn’t mean it will be smooth sailing for the rest of 2013. That’s because small business owners are still worried about the effects that new taxes and changes to health care will have on their business.
There have been bailouts aplenty during the last five years, but one group has been conspicuously overlooked: small-business owners. Now, they may finally be rebounding on their own. A variety of emergency measures in Washington have directly helped overdrawn banks, big businesses, the unemployed, underwater homeowners and millions of others survive the worst economic downturn in 80 years. But those sundry aid packages filtered down to small business the way water works its way through granite.