The Senate Small Business and Entrepreneurship Committee recently held a hearing to consider the financial impact of regulations on small businesses and to examine how entrepreneurs confront and shape regulations.
In his opening statement, Chairman Jim Risch spoke about how excessive regulations hurt entrepreneurs’ growth and operations. He stated that “small businesses need a break from the regulations that they’ve been suffering under for the last eight years. Under the Regulatory Flexibility Act that we have proposed, and we’re going to consider before the committee, the federal government will be required to evaluate the impact of new regulations and implement them in a realistic fashion.”
Risch also stated that the current regulatory decision-making process is unsuccessful and does not sufficiently include the entrepreneurs who bear the heaviest burden of compliance with new and existing regulations. “Often when I talk to entrepreneurs, they feel that their complaints, when there is a regulation proposed, fall on deaf ears. We all know it is much easier for a large business to comply when the federal government decides that they’re going to enact some type of regulation. We need to ensure that the agencies listen to small businesses when making rules.”
The National Small Business Association’s 2017 Regulations Survey found that small business owners spend an average of $12,000 every year on regulations, preventing more than half of small businesses from hiring new employees. Federal regulatory agencies estimate that the cost of complying with their own regulations is about $108 billion annually. Furthermore, their compliance costs are 36% higher than those of larger firms.