On January 18, 2011, President Obama signed an Executive Order that would reduce the regulatory burden on small business. In an op-ed article that he wrote for The Wall Street Journal, he noted that the regulatory burden is out of whack. Regulations serve a purpose, but federal regulations as a whole have become too burdensome, particularly for small businesses.
Like the Small Business & Entrepreneurship Council, I’m waiting to see how things pan out. It’s great to say that the regulatory burden on small businesses should be reduced, yet another to actually do it.
The Regulatory Flexibility Act (RFA), which has been around for many years, purportedly works toward the same end as the new Executive Order. The Office of Advocacy of the Small Business Administration works with federal and state agencies to reduce the regulatory burden; nonetheless the burden exists.
A senior fellow at The Heritage Foundation reported to Congress last fall that the cost of regulation to companies with 20 or less employees is some $10,500 per year, compared to an average of $8,000 for all companies. How can small businesses be expected to create new jobs when their existing burden is so high.
A reduction in the regulatory burden on small businesses would be a welcome relief. It remains to be seen if, and how soon, any relief will be instituted.