Fewer Regulations Saved $913 Million for Small Businesses

Every year, the Small Business Administration (SBA) Office of Advocacy reports on efforts to relieve the burden of new regulations on small businesses. These efforts are the result of the Regulatory Flexibility Act (RFA) that requires federal agencies to evaluate the impact of new rules on small businesses and to consider flexible approaches to complying with those rules.

Here's the good news, according to the SBA. In fiscal year 2017, changes to proposed federal regulations saved small businesses $913 million in regulatory costs. How did they achieve such savings? The savings are explained in the Annual Report which you can download and read here. The report details how 16 regulatory and (more significantly) deregulatory actions by six agencies achieved the $913 million in savings.

Chief among the reasons really had nothing to do with SBA's. It was the result of a couple of executive orders (EOs) designed to reduce the number of new regulations (see below). Recall the President's order that every agencies must repeal two regulations for every new regulations that it proposes. Because of this EO, there have been only two changes to the Federal Acquisition Regulations under the current administration.

Whether you believe SBA's cost savings estimate or, like us, believe it to be based on subjective non-quantifiable estimate, the point is that fewer regulations will result is tangible cost savings and those cost savings are more significant to small businesses who typically lack economies of scale and do not have the resources of larger businesses to comply.

EO 13771 Reducing Regulation and Controlling Regulatory Costs: Whenever an executive department or agency publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.

EO 13777 Enforcing the Regulatory Reform Agenda: The head of each agnecy shall designate an agency official as its Regulatory Reform Officer (RRO) Each RRO shall oversee the implementation of regulatory reform initiatives and policies to ensure that agencies effectively carry out  regulatory reform.

One of the first regulations to fall under the current administration was the onerous Fair Pay and Safe Wrokplaces rule, of which we have reported previously (see Fair Pay and Safe Workplaces Rules - Dead).