Fast-Forward Obama's Look-Back Review; Cutting Red Tape Could Restart Small-Business Jobs Machine

Article excerpt


Will President Obama's governmentwide review of existing regulations have a positive net impact on the psyche and bottom lines of small-business owners? The short answer is no. The burden of the existing system, made worse by the torrent of new regulations, has become far too costly and intrusive.

The president directed federal agencies and departments to produce plans to eliminate red tape and streamline compliance. The results of the look-back include 500 actions and recommendations that aim to produce a minimum of $10 billion in savings over 10 years. While that's progress (if these savings actually materialize), the amount represents a small fraction of the $1.75 trillion in total federal regulatory costs as quantified by the Small Business Administration's Office of Advocacy in 2010.

The White House calls the regulatory review unprecedented. Yet every administration going back to President Reagan's has undertaken similar programs, albeit with varying degrees of success. This is not to downplay Mr. Obama's initiative. The size of government and the vast changes in our economy warrant a permanent and ongoing review process. Office of Information and Regulatory Affairs (OIRA) Administrator Cass Sunstein has pledged that the current review will not end. He is very much among the people who are focusing on the cost of new regulations. In that case, OIRA has significant work ahead.

The quantity and scale of new federal regulation is unprecedented. Of the more than 4,200 regulations in the works, 845 of them affect small businesses - an 11.5 percent increase over 2009. Of major regulations (costing the economy $100 million or more) 224 were issued last year - an increase of 22 percent over 2009 and the highest number on record.

As Mr. Obama learned during his recent bus tour, small-business owners are working as hard as they can to survive in a difficult economy. Illinois farmer Rock Katschnig told the president that he tills the land as safely and efficiently as he can and would rather start his day plowing fields, not pushing paper. Please don't challenge us with more rules and regulations from Washington, D.C., he politely pleaded.

Mr. Katschnig specified three regulatory concerns that could impact his business, but the president was dismissive. He suggested that business associations sometimes make stuff up regarding regulations, so no need to worry because his administration uses common sense. Mr. Katschnig was urged to call the government to get the real story even though he technically was correct regarding the specific cases he cited. …