Rep. Duckworth's Small Business Paperwork Relief Act is a Flawed Solution for the Wrong Problem
Rep. Tammy Duckworth appears to have been caught up in the anti-regulatory fervor that has continued to afflict the House of Representatives ever since the GOP took control there in 2010. On Monday, Representative Duckworth, an Illinois Democrat, announced a plan to address what she said was a problem: “For businesses with less than twenty employees, the annual cost of federal regulation can be over $10,000 per worker.” But before we get to the proposed solution, there’s a problem with the stated problem: it’s just not true. The stat comes from the 2010 “Crain and Crain” study commissioned by the Small Business Administration’s (SBA) Office of Advocacy, a study that has been thoroughly debunked in a CPR white paper, by the Congressional Research Service, EPI, and others. Fully 70 percent of the study’s cost estimates came from a regression analysis based on opinion polling about perceived regulatory climate in different countries.
Having aired a faulty claim of a problem, Rep. Duckworth introduced a bill ostensibly aimed at fixing it, by reducing small business reporting burdens. The bill, the Small Business Paperwork Relief Act, would bar federal agencies from fining “small businesses” for first-time violations of …
Congress created the Office of Advocacy (Office) of the Small Business Administration (SBA) to represent the interests of small business before regulatory agencies. It recognized that, unlike larger firms, many, if not most, small businesses can’t afford to lobby regulators and file rulemaking comments because of the expense involved. The Office was supposed to fill this gap by ensuring that agencies account for the unique concerns of small businesses when developing new regulations. Instead, as new reports from the Center for Progressive Reform and the Center for Effective Government document, the Office of Advocacy is using its resources and influence to weaken the regulatory process, usually at the behest of big business.
The Office of Advocacy has steadily expanded its role in the rulemaking process, creating numerous opportunities to oppose regulation, slow the regulatory process, and dilute the protection of people and the environment against unreasonable …
When the government succeeds in protecting the public from harms, is that good news – or something to be atoned for by eliminating other successful protections? If the Department of Labor issues a new rule on construction crane safety, saving dozens of lives each year, should the agency also be required to eliminate an existing safety regulation? A policy of regulatory “pay-go” would prohibit agencies from issuing new rules, no matter how beneficial they are, unless they first identify and eliminate an existing rule that involves greater or equal costs for industry.
It sounds absurd, yet it’s an actual proposal supported by some very powerful people, though it has received relatively little attention. Mitt Romney has pledged in his economic plan to implement such a system (p. 61) if he is elected President, even saying that he’d issue an executive order for it on his first …
House GOP leaders may vote as early as this week on legislation that would eliminate the Independent Payment Advisory Board (IPAB), a cost-saving measure that was established as part of the national health care reform Congress passed in 2010. House leaders have also attached national restrictions on the right of patients to recover damages for medical malpractice (H.R. 5) to the IPAB bill, with the joint bill being called H.R. 5. The sponsors of the bills allege that the savings from tort reform will replace the money that would be lost if the cost savings board is eliminated. The combination of the two measures is pure politics. Repeal of the cost-savings board enjoyed some bipartisan support before GOP leaders attached the tort restrictions to it. Democrats are unwilling to vote for a bill that also limits the rights of tort victims. GOP leaders therefore hope …
On Tuesday, the House Judiciary committee is marking up the Regulatory Freeze for Jobs Act (H.R. 4078), which would block virtually any “significant regulatory action”—basically, any step toward promulgating any regulation that has a large economic impact or is otherwise controversial— as long as unemployment is over 6 percent. Rather than support initiatives that actually help the unemployed, a band of House Republicans prefer another cheap political trick here. The reality is that a moratorium would leave millions of Americans more vulnerable to health, safety, environmental, and economic risks, without improving the economy at all. In fact, the bill has the potential to shrink economic activity, not grow it.
To begin with, all of the economic studies agree: regulation does not cause a net loss in jobs. As other CPR Member Scholars and I have discussed (see here, here, here, here and here, for example …
In 1975, Indiana lawmakers joined a small but growing group of state legislatures passing aggressive medical malpractice “reforms.” Indiana’s law capped damages that victims of medical malpractice can recover at $500,000 and eliminated damages for pain-and-suffering altogether, Frank Cornelius, a lobbyist for the Insurance Institute of Indiana, played a role in helping pass this legislation. Twenty years later, Cornelius suffered a tragic series of negligent medical errors that left him wheelchair-bound, dependent on a respirator to breathe, and requiring a morphine drip for continuous physical pain. Facing medical expenses and lost wages of $5 million if he lived to retirement age, Cornelius experienced first-hand the effects of his lobbying for the insurance industry: he was forced to settle his claims for the $500,000 limit. In an op-ed in The New York Times several years later, Mr. Cornelius told his story, expressing regret and noting …
A new Pew public opinion poll published last week shows substantial public support for specific types of regulation, but skepticism about regulation in general. While 70-89% of the public would either expand or keep current levels of five specific types of regulation, 52% say government regulation of business usually does more harm than good as compared to 40% who think regulating business is necessary to protect the public interest. The five types of regulation were car safety and efficiency, environmental protection, food protection and packaging, prescription drugs, and workplace safety and health. These poll results generally echo previous polling, including an earlier poll by Pew.
It may be, as cynics are likely to point out, you can’t underestimate the power of the American people to hold two contradictory ideas at once. Perhaps, but the polling results do offer insight into how the public thinks about regulation …
Senators Mark Warner (D-VA) and Jerry Moran (R-KS) introduced a bill earlier this month that proposes to change regulatory and tax policies with the goal of encouraging more entrepreneurial activity and creating more jobs. The legislation contains a grab-bag of proposals, such as allowing more aliens with professional expertise in stem cell research to become permanent residents and extending an income tax credit for certain small businesses. I can’t speak to the merits of these and other proposals in the bill with one exception. The legislation would codify the current requirement found in executive orders that federal agencies complete a cost-benefit analysis of proposed and final “major” rules. This idea may sound reasonable on its face, but ultimately it would hinder the ability of federal agencies to issue health and environmental safeguards, and provide no help to the economy.
As other CPR scholars and I have …
Within the last hour, the House of Representatives approved the Regulations from the Executive in Need of Scrutiny Act – the REINS Act. The bill was among House Republicans’ top priorities for the year, and they’ve made it and a series of other anti-regulatory bills a centerpiece of their agenda. The plain purpose of the REINS Act is to make it all but impossible for the nation’s regulatory agencies to adopt regulations that would enforce a host of protective laws, including the Clean Air Act, Clean Water Act, Occupational Safety and Health Act, and many others. The Act would permit Congress (in fact, just one House of Congress) to ignore these legislative mandates in deciding whether to approve regulations, opening the door for much greater politicization of the regulatory process. House Republicans have pursued it in part to prop up their disingenuous argument that regulation is …
On Tuesday, Senators Susan Collins (R-ME) and Claire McCaskill (D-MO) introduced the Bipartisan Jobs Creation Act, legislation that offers a number of proposals for jump-starting the economy. The bill includes two provisions that would hobble the regulatory system without generating the new jobs that the Senators seek. If these provisions were enacted, the bill would block regulatory safeguards that protect all Americans and our environment. The bill’s regulatory provisions would make it harder for the EPA and other regulatory agencies to implement congressional legislation designed to clean up our air and water, make our food safer, and reduce avoidable workplace hazards.
The regulatory provisions in the Collins-McCaskill bill are a nod to Republicans’ specious claim that “excessive regulation” is holding back job growth. One provision would delay EPA’s rule limiting hazardous air pollutants from commercial and industrial boilers by 15 months, and prevent the agency …
