The White House is sending the message loud and clear to the business community: The Trump regulation rule will require that two rules be repealed for every new rule put into place. In an effort to reduce red tape and promote prosperity, the administration is allocating $0 dollars in 2017 for new regulations.
In fact, the Trump presidency is positioning itself to reduce regulatory burden as much as possible, by having federal agencies regularly propose rules they’d like to repeal. That list of potential rules to drop will be submitted to White House who will review them.
There are some potential snags that the administration could run into attempting to repeal these regulations. As the repeal process stands today, under the Administrative Procedure Act, repealing a regulation requires the same long bureaucratic process that enacting a regulation entails.
The flurry of regulations under the Obama administration has been blamed for crippling small business, and stifling entrepreneurship. In the past eight years, The Federal Register a record of all relevant regulations, and it’s now nearly 100,000 pages long, a historic record. In fact, it grew by nearly 20,000 pages during Obama’s presidency.
President Reagan faced a similar situation when he entered the White House. He brought page counts down from Carter’s nearly 73,000 to as low as 44,000. Many suspect President Trump will try to trim the federal register aggressively during his tenure.
What keeps small business owners up at night
Small Business owners have not been quiet about the expanding regulatory burden, and how it’s hurting their bottom line. A recent survey by the National Small Business Association found that 58 percent of small business owners found federal regulations to be the most burdensome.
For any small business owner, they often face costly regulatory compliance from local, state and federal authorities.
Get a glimpse into the regulatory maze
Forbes did a analysis of all the federal agencies that can regulate you if you’re a small business. They kept their analysis to only federal rules that pertain to workforce-related regulation. These are the rules that apply to firms with 1-15 employees”
- Fair Labor Standards Act (overtime and minimum wage [27 percent minimum wage increase since 1990])
- Social Security matching and deposits
- Medicare, Federal Insurance Contributions Act (FICA)
- Military Selective Service Act (90 days leave for reservists; rehiring of discharged veterans)
- Equal Pay Act (no sex discrimination in wages)
- Immigration Reform Act (eligibility must be documented)
- Federal Unemployment Tax Act (unemployment compensation)
- Employee Retirement Income Security Act (standards for pension and benefit plans)
- Occupational Safety and Health Act
- Polygraph Protection Act
- Immigration Reform Act (no discrimination with regard to national origin, citizenship, or intention to obtain citizenship)
Additionally, recent changes to overtime compensation, minimum wage hikes and Obamacare have only further increased the cost of doing business. For too many small business owners, the burden is just too onerous to turn a profit.
Takeaway: Prosperity out of reach
New business creation has been declining steady in recent decades, and plummeted to 50 percent of 1978 levels by 2011. Small business, which was once the largest jobs machine in America, has stalled under the weight of rising healthcare costs and regulations.
Big businesses often have the resources to absorb the rising costs of doing business in today’s America. Small businesses, which often operate under small profit margins, can be quickly rendered unprofitable by a few new regulations.
Reducing the regulatory burden is what many experts say may improve prospects for small business owners. Considering that small business remains the largest employer in the country, making life easier for entrepreneurs may be exactly what we need to see healthy economic growth.
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