Last month, Sen. Majority Leader Harry Reid made the case on the Senate floor that government regulations don’t harm the economy and job creation. I’m not sure what job creators the Majority Leader is talking to, but almost every small business owner I have talked with tells me that over-regulation is harming their business and preventing them from hiring.
Mr. Reid said, "My Republican friends have yet to produce a single shred of evidence that the regulations... do the broad economic harms they claim. That's because there aren't any." Well, on behalf of the nearly 30 million American small businesses, let me take this opportunity to share some information.
According to an October Gallup poll, small business owners cited compliance with government regulations as the most important problem facing them today—more than consumer confidence in the economy or the lack of consumer demand. Small businesses are the engine of job creation, creating more than half of the nonfarm private Gross Domestic Product, but most small firms are simply crushed by the onslaught of federal regulations.
According to a 2010 Small Business Administration Office of Advocacy study, small firms bear a regulatory cost that is 36 percent higher than the cost of regulatory compliance for large businesses, because they don’t have the resources to deal with federal regulations.
Regulations already cost the American economy $1.75 trillion annually, not to mention the 200 new Obama administration regulations that are expected to cost over $100 million each. Seven of those new regulations will cost the economy more than $1 billion each.
During a September Small Business Committee hearing, David Ludlam, director of the West Slope Colorado Oil & Gas Association in Grand Junction, CO, said, “We can give the administration a more practical jobs plan for America that is quite simple: Remove regulatory roadblocks to ‘shovel ready’ energy projects in Western Colorado. We believe this would be a great first step to creating high-paying jobs.”
Small business owners like Mr. Ludlam are our best and most robust job creators. Small firms have generated 64 percent of net new jobs over the past 15 years. Economic recovery begins with our small businesses, but this will not happen unless we rein in the mass of regulations coming from Washington.