Sam Graves

 

Earlier this year, President Obama issued Executive Order 13,563, requiring all Executive branch federal agencies to establish procedures for a retrospective review all of their existing regulations. Initially, I was hopeful this review would yield real results; that the President had finally heard the pleas of our small business community and was ready to give them the tools necessary to expand their businesses and create jobs.

In late August, the White House released the final plans of this review and their plan to move forward, claiming that many of their changes were focused specifically on small businesses.  Unfortunately, the reality is that this plan is nothing more than smoke and mirrors. It focuses on modest, cost-cutting measures such as reduced paperwork, but does nothing to confront the most problematic and debilitating federal regulations that are crippling our small businesses.

For instance, independent regulatory commissions like the SEC and the Federal Reserve do not fall under the jurisdiction of Executive Order 13,563. As a result, this review does not include regulations created by Dodd-Frank, which are some of the most burdensome for small businesses. Further, loopholes in the Executive Order could allow agencies to repeal or modify rules and then impose that same "requirement" later on through a different process.

The answer to our overregulation problem cannot be solved with just a review. In fact, from 1978 to 2004 there have been seven reviews similar to Executive Order 13,563, yet our regulatory environment is more out-of-control than ever.  In 1980, Congress even took on regulatory reform, passing the Regulatory Flexibility Act (RFA), legislation aimed at relieving the stress of onerous regulation on small businesses. The RFA mandates that all federal agencies examine the impact of their proposed rules on small businesses, and if those impacts are significant, the agency must consider less burdensome alternatives.

Quite simply, if agencies adhered to the RFA from the onset, the need for these presidentially mandated retrospective reviews would be eliminated.  Unfortunately, loopholes and inadequacies have allowed many agencies to avert the RFA's requirements. Earlier this year, I sponsored two bills aimed at strengthening the RFA; the Small Business Size Standard Flexibility Act of 2011 (H.R. 585) and the Regulatory Flexibility Improvements Act of 2011 (H.R. 527). These two bills would close loopholes used by agencies to avoid compliance with the RFA.

Onerous regulations place costly and, oftentimes, unmanageable burdens on the backs of small business owners, which prevent many from hiring additional employees and even force some to close.  Small businesses are the cornerstone of our economy and our best job creators. If we want to get our economy back on track and put people back to work, we must be serious about regulatory reform. We need to go beyond reviews and rhetoric and take action.

Last week, the Committee heard testimony from the Honorable Cass Sunstein, Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, who is responsible for the implantation of these most recent retrospective reviews. Mr. Sunstein spoke of several changes that will cut costs and be helpful for small business. But while I applaud these changes, I urge Mr. Sunstein to do more and produce more results that provide relief for small business.

The truth of the matter is that undertaking the kind of true regulatory reform needed is no simple task, but it is something we can and must do.  We must go beyond the impact of particular regulations and look at the cumulative impact of rules during the rulemaking process. As I told Mr. Sunstein during the hearing, it is easy to make things bigger and more complex but it takes a touch of genius and a lot of courage to move in the opposite direction.  I'm hopeful the President and Mr. Sunstein will join with me in undertaking this ambitious goal.


Sam Graves

Congressman Sam Graves is the U.S. Representative for Missouri's 6th congressional district, serving since 2001, and serves as the Chairman of the House Small Business Committee.