The annual cost of regulation -- $1.75 trillion, according to the Small Business Administration -- is greater than the total of all income taxes collected last year. It equates to approximately $15,500 per household in 2011 dollars without accounting for the cost of all the new regulations added since 2008.
Regulation costs fall most heavily on America's 27 million small businesses, which employ approximately half of all U.S. workers, produce half of the GDP, and have generated 65% of new jobs over the past 17 years. Businesses with fewer than 20 employees spent $10,585 per employee in 2008 to comply with federal regulations, 36% more than large firms. Put another way, for every four employees earning $40,000 per year, small companies' regulatory compliance costs would have more than paid for hiring one more worker. Excessive regulation kills jobs.
Regulatory costs fall more severely on manufacturing firms than other types of businesses. This is especially important for Connecticut's 166,200 manufacturing workers, where manufacturing makes up 10.5% of the state's output. Regulations cost the average manufacturing company $14,070 per employee (29% of payroll), 74% more than average for all businesses. For manufacturing companies, regulations kill roughly one job for every three people working. Small manufacturing companies -- the heart of Connecticut's economy -- bear the brunt of regulations; $28,316 per employee for a company with fewer than 20 employees (more than double the cost of their larger rivals). With costs like these, it is no wonder Connecticut's small manufacturers are struggling to survive.
*PASS THE REINS ACT
The Regulations from the Executive in Need of Scrutiny (REINS) Act would require Congress to take an up-or-down, stand-alone vote; and require the President to sign off on all new major rules before they can be enforced on the American people, job-creating small businesses, or state and local governments. The REINS Act is about improving the regulatory process. If the REINS Act becomes law, members of Congress will
be accountable to their constituents on the question of whether a new regulation is truly needed or is an unnecessary burden. This will encourage Congress and agencies to work together to develop and pass regulations that implement the original intent of laws. Furthermore, the REINS Act would prevent administrations from either party from bypassing Congress to implement a political agenda through regulation.
*REFORM FINANCIAL REGULATION
The Dodd-Frank financial reform law has significantly increased the costs and reduced the viability of small,
community banks upon which Connecticut's small businesses rely for business loans. This law mandated some 259 rules along with its 188 other rule suggestions -- all of which will be decided by unelected bureaucrats. Financial regulation should focus on disclosure and transparency. While certain parts of the law are praiseworthy, too much is left unidentified. We must amend the regulations to make sure business growth is not obstructed and lending to Connecticut's small businesses is trouble-free.
Repealing this costly and intrusive government mandate will cut the deficit by $701 billion. We should replace it with a market-based proposal that reduces costs to individuals and increases competition, allowing consumers more freedom to choose their health care