Hearing of the Senate Small Business and Entrepreneurship Committee - How the Hidden Cost of Federal Regulations Impact Small Businesses & Economic Growth

Hearing

Good morning and thank you for joining me for the Senate Small Business Committee's field hearing to discuss how hidden cost of federal regulations impact small businesses and economic growth.

The most costly and complex regulations have come from laws that represent the largest federal takeover in two major industries: health care and banking. Today we will focus our discussion on how Obamacare and the Dodd-Frank "Too Big to Fail" regulations impact our communities, small businesses, and the economy, as well as the actions I am taking in Congress to pass regulatory relief for small businesses.

During the Obamacare debate, then-House Speaker Nancy Pelosi was certainly correct when she said, "We have to pass the bill to find out what is in it." The 2,000 plus page bill has yielded more than 14,000 pages of regulations from the Departments of Health and Human Services, Labor, Treasury, Social Security Administration, and more.

What's even more worrisome is that unelected bureaucrats in Washington are the ones who issue these regulations as if the world is flat and people will just accept the growing demands of the health care law, but these regulations have real consequences.

Louisianians constantly question if they can keep their health insurance coverage, doctor, and their job.

The 30-hour work week is a prime example of an increased regulatory burden on businesses that hurts workers and hinders economic growth. Starting in 2015, employers with 100 or more full-time workers will be subject to the employer mandate using 2014 workforce data. In 2016, employers with 50 or more full time workers will be subject to the employer mandate and all of the related reporting requirements.

The ACA defines a full-time employee as an individual who is employed an average of at least 130 hours per month (30 hours per week). Large employers must then offer minimum essential coverage to full-time employees and their dependents for a corresponding 6-12 month stability period if an employee averages full-time hours during the look-back measurement period. If an employer chooses not to offer minimum coverage to full-time employees and their dependents, they will pay employer mandate penalties, which will be calculated monthly.

As a result, many businesses are cutting hours to prevent workers from going over the 30-hour work week, laying folks off to stay under 50 employees, or choosing not to hire more workers to prevent future employer mandate penalties.

In a previous hearing in Shreveport, I was alarmed to hear one of the witness say, "For the first time in [her] lifetime, small businesses were choosing not to expand."

While Republicans in Congress fight for full repeal of Obamacare and its burdensome mandates, we will also work to pass legislation that restores the 40-hour work week. The "Forty is Full-Time Act" will provide much-needed relief for businesses by simplifying the reporting requirements and complex accounting measures that seek to raise compliance costs and taxes on job creators.

Another piece of legislation I have opposed was the Dodd-Frank "Too Big to Fail" legislation. Under the guise of a painful financial crisis, Dodd-Frank became a huge taxpayer funded bailout for large financial institutions, while community banks became "Too Small to Save", ignoring major issues community banks continue to face in a stagnant economy.

Not only does Dodd-Frank fail to effectively address the root problems that caused the crisis, but it has since increased legal and regulatory compliance burden and created more barriers for small community banks to continue providing niche services and generate loans for small businesses to access capital.

As you will learn in today's hearing, community banks provide most of the small business loans for our neighbors, and it comes as no surprise that lending went down as compliance costs went up during the enactment of Dodd-Frank.

I am fully invested in providing full regulatory relief for community banks. I have authored a bipartisan bill that would reduce major impediments for small banks and thrifts to raise capital or pay dividends. This will unleash community banks ability to lend to small businesses so they can grow their businesses, offer more goods and services to the community, and grow the economy.

Small businesses are often on the frontlines of seeing the impact of government regulations. They generally don't have highly paid, well connected lobbyist fighting for back-room deals in Washington. That is precisely why as Small Business Committee Chairman, I believe it important we do these field hearings and bring Washington out of the beltway bubble in order to hear from the hardworking constituents we represent. I look forward to today's discussion, and plan on bringing their suggestions and reforms back to Washington to roll-back the impact of government regulations on our community, businesses, and the economy.

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