U.S. agencies instructed to consider regulatory burdens on small businesses, startups

    By Adrienne Burke | Small Business

    Small business owners struggling under the burden of regulatory compliance, take heart. In this election season, the White House hears your cries.

    The Executive Office yesterday reminded the heads of federal departments and agencies that some "sectors and industries face a significant number of regulatory requirements, some of which may be redundant, inconsistent, or overlapping." A guidance "effective immediately" urged agencies to take into account the costs of cumulative regulations that "can create special challenges for small businesses and startups."

    Cass Sunstein, the Administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget, instructed agencies to "avoid unintentional burdens that could result from an exclusive focus on the most recent regulatory activities."

    Sunstein's memo follows a meeting earlier this month between President Obama and the Business Roundtable, an association of CEOs of leading U.S. companies with combined annual revenues over $6 trillion. The Business Roundtable has stated that "there are good reasons to believe that excessive regulation is hampering economic growth and recovery in the job market," and cited an October 2011 Gallup poll finding that "complying with government regulation is the most important problem facing small businesses today — more than either low consumer confidence or lack of consumer demand."

    In a recent report, the Business Roundtable CEOs pointed to three broad categories of regulations that concern them most:
    •    environment, including upcoming greenhouse gas regulations, the suite of proposed and anticipated regulations affecting hydraulic fracturing, and revisions to the particulate matter standards;
    •    implementation of the Patient Protection and Affordable Care Act, including imposition of new health care taxes and the definition of full-time and part-time employees; and,
    •    implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, including implementation of the Volcker Rule, regulation of derivatives and conflict minerals disclosure.

    "Taken together, these proposed or anticipated regulations will affect virtually every company operating in the United States and are likely to impose many billions of dollars of new annual regulatory costs on the U.S. economy," the CEO group said.

    Yesterday's federal guidance instructs agencies to "carefully consider" specific steps to increase the net benefit of regulation, including: discussing new rulemaking and existing regulations with affected stakeholders; engaging with state, tribal, and local agencies to improve regulatory outcomes; obtaining public input on rulemaking; considering cumulative effects of regulations on small businesses and startups; identifying opportunities to reduce administrative costs; analyzing costs and benefits of relationships between new regulations and those already in effect; integrating and simplifying new and existing rules; coordinating timing, content and requirements of multiple rulemakings for a particular industry or sector; conducting retrospective analysis of existing rules with consideration for interactive and cumulative effects.

    Meanwhile, AFL-CIO Health and Safety Director Peg Seminario criticized the guidance. She said in a statement, "This one-sided directive is focused solely on the costs and burdens to businesses, and will only serve to further delay or weaken needed worker and public protections. OMB has been holding up needed rules, for months on end; including a draft proposed OSHA rule to protect workers from silicosis, which has been held by OMB for more than a year. The Obama administration, including OMB, should direct its efforts to improving and strengthening protections for workers and the public."

    What's your take? Do you expect regulatory relief? Do you share the same concerns as the CEOs of the nation's biggest companies? Tell us in the comments or on Twitter at #SmallBizVote.

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