As my former Senate and House colleagues consider making long-overdue reforms to our nation’s outdated tax code, I urge them to think like a small-business owner and be mindful of how the proposed changes will ultimately affect Main Street America.
From the mom and pop grocery store to the family-owned cafe, small businesses are the backbone of our economy and are responsible for nearly two-thirds of the net jobs created in this country. Yet too often, they don’t have a say in the government policies handed down that directly affect their ability to hire new employees and contribute to economic growth.
Businesses crave certainty. If they know about a costly new regulation or upcoming changes in tax policy, small-business owners can save and plan accordingly. It’s the uncertainty and the seemingly haphazard way in which some federal regulations are currently handed down that keeps the small-business owner awake at night.
Clearly, if the mere mention of the word regulation is enough to immediately send shivers down the spine of small-business owners from Colorado to Arkansas, then the process is broken. Washington decision-makers have the power to help Main Street America rest easier right now and it starts by simply asking whether a proposed regulation or policy change will impact small businesses before moving ahead with implementation.
We know the current regulatory structure is holding back economic growth. In a recent Gallup poll, 85 percent of small-business owners cited government regulations as the reason they’re not hiring. And the uncertainty surrounding the federal regulatory process is one of the top three concerns the National Federation of Independent Business regularly hears from its members. When regulations are discussed in Washington, too often the topic is approached from a theoretical position. And, in theory, we can discuss a regulation and the benefits and consequences of each rule. But, multiply this discussion by 3,300 (the number of regulations currently in the federal pipeline, waiting to be implemented) and then factor in all the unintended consequences of each new regulation. The thought is almost too overwhelming to consider.
But this is the reality for many hardworking Americans. Small-business owners are not just dealing with the unintended consequences of a few bad regulations, but the compounded effects of a complex regulatory system that’s more interested in collecting fines than in ensuring small-business success.
Calling for system-wide reforms isn’t the same thing as calling for the regulatory structure to be dissolved. Any small-business owner will tell you that regulations are essential to the health of both their businesses and their consumers. But, often, well-intended regulations fail to consider everyday realities and, as a result, neither the employer nor the consumer benefits.
One example of this is ground-level ozone rules. In 2011, President Barack Obama halted the EPA’s plans to tighten the standard for ground level ozone due to an outcry from manufacturers, who would have been on the hook to play billions annually to comply. Many small and large U.S. manufacturers would not have been able to expand without having other local operations close or reduce their operations. Despite this history, the EPA is set to take up the regulation again this year, even after a federal court recently ruled that the current ozone standard protects human health. While enormous progress has been made to improve air quality, the system often seems designed to regulate certain industries out of business.
And the longer Washington waits to reform the system, the longer Main Street America will suffer. During the past decade, the cost of regulations has far outweighed economic growth. Just since 2006, there has been a 60 percent increase in federal regulations that cost $100 million or more to comply with. That’s money businesses are not investing in research and development, new staff, training or in their own operations.
It’s time we approach this problem not from the mindset of lawmakers, but from the viewpoint of small-business owners. Whether it’s during a debate on tax reform or budget policy, Washington should resolve to spend more time thinking about how its policies and regulations will enable American small-business owners to be successful in 2014.
Blanche Lincoln is a former senator from Arkansas and the current chairwoman of the National Federation of Independent Business’ Small Businesses for Sensible Regulations coalition.