Brooklyn's Progress
June 2004

Congresswoman Nydia M. Velázquez (D-N.Y.), Ranking Member of the House Small Business Committee, joined her colleagues today to highlight the need to relieve small businesses from burdensome federal regulations that keep them from growing and creating new jobs.

“Small businesses today face an array of challenges that weigh on them more heavily than their corporate counterparts,” Congresswoman Velázquez said.  “One of those challenges is federal regulations, and the disproportionate burden they place on our nation’s small firms.  The Bush administration has acknowledged this unfairness, and has promised to help.  But the truth is President Bush actually holds the all-time record for the number of federal regulations submitted and issued under any president.”

The Regulatory Flexibility Act (RFA) which became law over two decades ago, requires federal agencies to assess the economic impact of their rules on small business.  However, many agencies fail to comply with the RFA, reflected in the high number of cases in which the Small Business Administration’s (SBA) Office of Advocacy must intervene each year.

The Committee considered one legislative solution to this problem – the Regulatory Flexibility Improvement Act of 2003 – which would close some of the loopholes and hold agencies accountable for their overly burdensome rules.  The bill defines specific economic effects that would have to be examined by agencies, and provides the leverage that SBA’s Office of Advocacy would need in order to take on executive agencies in court. 

Most importantly, perhaps, it would apply the panel process to a number of federal agencies, including the Internal Revenue Service (IRS), the Centers for Medicare and Medicaid Services (CMS) and the Federal Communications Commission (FCC), and compel them to use a more rigorous system of rule evaluation.  The panel process now applies to both the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA), requiring them to receive input from affected small businesses before the proposed rules are published.

“The burden of federal regulations is a real problem for small businesses across the country,” Congresswoman Velazquez said.  “Unfortunately, agencies tend to use a one-size-fits-all approach that mainly hurts our small business owners.  Through H.R. 2345, we have the opportunity to make the RFA a stronger and better enforcement tool.  If small businesses are less burdened by government rules, they are in a better position to grow our local economies and create jobs.  And this will give a boost to our economy and provide employment opportunities for the millions of Americans still searching for work.”