As my constituents in Wisconsin know, times are tough for small businesses. Regulations, new taxes, and careless spending have left many small business owners feeling helpless and abandoned.
According to a report released this week by the Associated General Contractors of America, Wisconsin lost the second-highest percentage of construction jobs in the country. There are various factors that go into a frustrating employment number like that, but overly burdensome regulations should not be one of them.
This week, my House colleagues and I passed the Red Tape Reduction and Small Business Job Creation Act to provide certainty to the economy. President Obama's own Jobs Council recommended some of these same reforms.
First off, we need to address the deluge of "economically significant" regulations, meaning they would impose $100 million in costs on the economy, coming out of the Obama Administration.
The President said he would direct "federal agencies to do more to account for--and reduce--the burdens regulations may place on small businesses."At the same time, according to the Administration's own data, we have seen a 52 percent increase in economically significant regulations.
With that in mind, the House-passed legislation will freeze all significant federal regulations until the unemployment rate is six percent or less. This would force federal agencies to think about small businesses and the millions of unemployed Americans, instead of handing down regulations that further restrict their operations.
Additionally, since 1948, Administrations of both parties have issued on average 17 percent more "economically significant" regulations during the lame duck period between Election Day and Inauguration Day than any other time of the year. This legislation stops all future Administrations from imposing these last-minute regulations as they leave office.
Second, the House-passed regulatory reform would streamline federal permitting and environmental regulations. Streamlining the federal permit process would allow new businesses to form and existing businesses to expand. This act would provide the stability small business owners need in order to move forward and help restore the economy to full power.
Third, the legislation also ensures that future regulations consider potential economic costs. The legislation requires the Securities and Exchange Commission to run a cost-benefit analysis for each regulation it intends to impose moving forward. These analyses would force the SEC to consider cost to job growth as well as the benefit of the regulation. This was one of the recommendations by the President's Jobs Council.
The Small Business Administration found that small businesses pay around 36 percent more in regulatory costs than large firms, which is over $10,000 per employee, per year. No wonder the U.S. fell from 4th to 13th in the "Ease of Starting a Business" rankings by the World Bank. It's now easier to start a business in Georgia, Armenia, and Belarus, which were all Soviet Union republics not long ago, than it is in the U.S.
It's time we let American businesses do their job. Prosperity will not be achieved through over-regulation.
The future of American small business belongs in the hands of small business owners -- not in the hands of Washington bureaucrats.