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The Washington Times: Mounting federal regulations are hurting the U.S. economy

Tuesday, January 03, 2012

As policy discussions in Washington become more and more entrenched, hardworking Americans across the country are calling for change as they continue to shoulder the burden of impractical policies.

Recent comments by Senate Majority Leader Harry Reid demonstrate a growing disconnect between policymakers creating regulations and small businesses dealing with the realities of complying with them.

“My Republican friends have yet to produce a single shred of evidence that the regulations they hate so much do the broad economic harms they claim,” the Nevada Democrat said Nov. 15. “That’s because there aren’t any.”

As a small-business owner, what I am seeing on the front lines, so to speak, refute Mr. Reid’s claims. In the past three years, I’ve faced more paperwork requirements and more operational changes to meet new mandates than ever before.

A recent Gallup poll supports my firsthand experience. It found that compliance with government regulations is the single-greatest problem small-business owners face today. One in three small businesses is concerned about going under within the coming year. It’s no wonder that the rate of startup businesses has reached a 25-year low, according to a new study by Challenger, Grey and Christmas, an executive outplacement firm.

Even the Obama administration acknowledges that regulations affect employment and the economy. Cass Sunstein, the president’s regulatory chief, said in a recent Washington Post article that he is, “sensitive to the possibility that when there is higher unemployment, there could be a higher risk that people working in regulated industries may have to wait longer to find new jobs.” And if there is no risk to the economy, why has the administration delayed issuing some regulations, citing their impact to jobs and growth?

I’ve read with interest critics who say that since businesses aren’t reporting regulations as the reason for layoffs to the Bureau of Labor Statistics, they must not be a problem. I can tell you in no uncertain terms that they are. Much of the cost of regulation is concealed in higher prices for products and opportunities that we can’t pursue or jobs we can’t create because of added regulatory burdens. A study by the Small Business Administration found that small businesses like mine pay more than $10,000 annually to comply with federal regulations.

Today, there are more than 4,200 new rules and regulations looming in the federal pipeline, 845 of which directly affect small businesses. For me, this uncertainty is unsustainable and only adds to the economic heartburn created by regulations already on the books.

Take for example my firm, the Forestry Co. We are a small, independent business with a dozen employees that manage forests for investors and landowners. But the ability to provide those services has become increasingly difficult because of an unwarranted regulation.

Earlier this year, logging roads were identified as point source pollution and the Environmental Protection Agency recently declared they must have permits. As a result, anyone who uses rural roadways will need to obtain EPA permitting. With thousands of miles of unpaved roads in counties throughout the U.S., the newly created process is a logistical nightmare that places a huge burden not only on the commercial forest industry but local governments as well. Is this the type of support President Obama had in mind when he vowed to fight for the middle class?

No rational business owner would argue that all regulation is bad. Government oversight helps to ensure the safety of the public and the environment. But Mr. Reid and others in Washington who would argue that regulations aren’t hurting the economy are unable to see the forest through the trees.

Small businesses create two-thirds of all new jobs and, as such, lawmakers should be doing everything within their power to help them succeed.

From where I sit, Washington does not have all the answers nor can it remedy all of this country’s problems. In fact, it is often making the problems worse. So, instead of creating new regulations they think will be effective and then defending those decisions despite clear evidence to the contrary, we should be asking Washington to stop this vicious cycle. Let’s halt unnecessary regulations and start bringing about regulatory reform. It might just be the best thing that ever happened to the economy.

Don Curtis is vice chairman of the Florida chapter of the National Federation of Independent Business, Small Businesses for Sensible Regulations and owner of the Forestry Co.


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