05/01/2006
NFIB praised results of a recent report by the U.S. Small Business Administration Office of Advocacy showing the Regulatory Flexibility Act saved small business $6.6 billion in regulatory costs in fiscal year 2005. NFIB called the report a reminder that there is still a lot of unfinished work that must be done to relieve small business from the burden of regulation. According to the SBA, small businesses face a regulatory burden of roughly $7,700 per employee per year.
“This report shows that some positive steps have been made toward lessening the time, money and effort America’s No. 1 job creators spend on regulatory compliance. But Congress, the regulatory community and small business need to come together to do more,” said Dan Danner, executive vice president of NFIB.
About the RFA
The RFA was enacted in 1980 to require that federal agencies consider the impact of their regulations on small business. Though it was intended to protect small business, it did not include any recourse against agencies that did not comply with the law. It wasn't until 16 years later that Congress passed the Small Business Regulatory Enforcement Fairness Act of 1996, allowing for judicial review of federal agencies' compliance with RFA. In 2002, the RFA was amended to require federal agencies to establish policies and procedures to promote compliance.
To this day, the RFA only requires federal agencies to consider the impact of their regulations on small business; if the agency can provide a reasonable explanation for its regulatory burden on small business, it does not have to amend its rules.
NFIB Fights for Regulatory Fairness
Leading the fight for the reduction of regulatory burden, NFIB works to educate regulatory officials about how burdens disproportionately affect small-business owners. The SBA reported in 2005 that small businesses spend 45 percent more than their larger counterparts to comply with the same federal regulations.
NFIB continues to serve as a watchdog to ensure the impact on small business is considered before a newly proposed regulation is enacted, instead of after the damage is done. We maintain a close relationship with agency ombudsmen, as well as the office of the National Ombudsmen for Small Business, and work closely with government agencies when NFIB members voice concerns about specific regulations. Last month, NFIB Manager of Regulatory Policy Andrew Langer testified before a House subcommittee in support of improvements to the Paperwork Reduction Act.
Regulatory fairness is a top priority for NFIB’s Legal Foundation, which files amicus briefs in numerous cases to ensure compliance with the RFA and SBREFA. In 2000, NFIB sued the Army Corps of Engineers for its failure to consider the impact of a new wetlands rule on small business, and has filed amicus briefs in several labor- and tax-related cases.
How You Can Help
NFIB is working on Capitol Hill to ease the regulatory burden, and stories from Main Street go a long way toward that end. If you have a story about how a specific regulation has affected your business, please contact NFIB’s Grassroots department. NFIB can share your story with lawmakers so they know the difficulties small-business owners face in trying to run their companies and comply with overwhelming regulations at the same time.
“NFIB believes small business plays a role in keeping communities healthy and safe—but regulations should be based on common sense and not be one-size-fits-all. We urge Congress to consider the unique challenges small-business owners face when developing regulatory programs and procedures,” said Danner.
To help federal agencies comply with the RFA, urge your lawmakers to strengthen the SBA’s Office of Advocacy.
