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.”
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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.
The federal government has gone too far on many nonessential regulations that are harming small businesses. Employers are rightly concerned about the costs of these regulations – so they stop hiring, stop spending and start saving for a bill from the federal government.
However, it is Washington’s responsibility to remove these barriers and make sure the government carefully considers regulatory consequences on our most robust job creators before finalizing them. That’s why our Committee brought the Regulatory Flexibility Improvements Act of 2011 to the floor for a vote last week, and why the House is voting on the REINS Act today.
The Regulations from the Executive In Need of Scrutiny (REINS) Act would require Congress to affirmatively approve every new major regulation proposed by the executive branch before it can be enforced. The Regulatory Flexibility Improvements Act of 2011, which passed the House with bipartisan support, would force federal agencies to fully examine the impact of their proposed regulations on small businesses and consider less burdensome alternatives if those impacts are significant. Both of these bills are part of the House Republicans Plan For America’s Job Creators to help rein in the Obama administration’s regulatory assault on the private sector.
Part of any solution to get our economy going should include steps to free up our small businesses by peeling back unnecessarily burdensome regulations, ending the continual threats of tax hikes, and addressing the cloud of federal debt that hangs over our economy.
But we can’t do this alone. I hope the Senate will put politics aside and take up our House’s legislation that aims to rein in the regulatory process, so that we can give small businesses the certainty and relief they need to help our economy grow.
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