If there is one thing I hear from small business owners in Florida, it’s that they feel powerless to confront the federal government’s regulatory regime. By contrast, large multinational corporations almost always have a seat at the table, with armies of compliance officers to get around the rulebook. In other words, small businesses are often most affected by the federal regulations but least represented in how they come about.
Increasing small business involvement in the regulatory process should be the baseline for any meaningful reauthorization of the Small Business Act, which was last reauthorized 19 years ago. That is one of the reasons why, for the last seven months, the Senate Committee on Small Business & Entrepreneurship has been working in a bipartisan fashion to bring the law into the 21st century.
The legislation released last week is the product of the committee’s eight legislative hearings and countless discussions of how best to help small businesses. It includes 15 individual bills from committee members, including regulatory changes that give small businesses a seat at the table of government bureaucrats in charge of writing regulations.
Unfortunately, Democrats on the committee said they could not support any bill that gave small businesses a voice in the regulatory process. Legislating requires compromise, and we made significant concessions to our Democratic colleagues on the regulatory side. But they insisted there could be absolutely no regulatory reforms.
My Republican colleagues and I would like to see significantly more regulatory reform. But in the spirit of compromise, my bill did not eliminate a single regulation. Instead, it would enact bipartisan reforms designed to give small businesses more notice and opportunities to comment on proposed regulations that would directly impact their bottom lines. These include the following reforms:
- Sen. Joni Ernst’s Prove It Act, which would allow the Office of Advocacy to “throw a flag on the play” when an agency certifies that its proposed regulation would not significantly impact small businesses;
- Sen. Kyrsten Sinema’s SMART Act, which would require agencies to publish retrospective review plans when they issue new major rules so that they evaluate if rules meet their goals within 10 years;
- Expanding panels with small businesses and regulators to agencies that ignore the Regulatory Flexibility Act, so that small businesses have an opportunity to provide input on regulations before they are enacted;
- Codifying portions of President Bill Clinton’s Executive Order 12866 to require agencies to conduct retrospective review of existing regulations to make sure they are meeting their goals; and
- Sen. Susan Collins’ bill, which would allow small businesses to participate in small business review panels electronically so that they do not have to travel to Washington in order to be heard.
Sadly, Democrats characterized these reforms as “a wish list from corporate interests who seek to stifle government regulations that protect our health and safety.”
Nothing could be further from the truth. These are improvements that will help small businesses currently suffering from an outdated regulatory regime stacked against them. That’s why small business associations, including the Small Business & Entrepreneurship Council, National Federation of Independent Business, the Small Business Investor Alliance, America’s Small Business Development Centers, U.S. Chamber of Commerce Small Business Council, and the National Association for Equal Opportunity, have widely praised my legislation.
We can debate the merits of deregulatory actions like 2-in-1-out and regulatory budget proposals in another committee. In the meantime, small businesses that lack an army of lawyers and compliance staff need a voice in Washington.
Since day one, my approach has been to work with both Democrats and Republicans throughout this process. In the 19 years since the last comprehensive reauthorization of the Small Business Act, we’ve watched the Internet economy explode, Beijing brute-force its way into economic prominence, and American capital development backslide into a troubling decline. To say that we could be doing more to help American small businesses thrive in these new circumstances isn’t just an understatement, but a matter of national urgency.
Ensuring small businesses have a voice in the regulatory process is critical, but we must also prepare them to grow and compete with aggressive nation-states like China. That is why my legislation is a reasonable, bipartisan proposal that would promote the success of innovative, high-growth small businesses through the Small Business Investment Company program and other modernized export programs. It would offer R&D resources to firms at no cost to the taxpayer via Small Business Innovation Research and Small Business Technology Transfer reforms. And it would revamp regulations to create new openings for entrepreneurs and new small businesses entering markets dominated by huge competitors.
The task ahead of us is too important for partisanship; the existential threat that China poses leaves no room for red-blue squabbling.
We have done our due diligence. We have produced an improved version of the Small Business Act that will shore up advanced manufacturing, enhance an array of programs to assist firms with development, and give small businesses a much-needed voice to navigate Washington’s regulatory environment.
Anyone paying attention can recognize that our current way of doing things is hampering small businesses, shifting firms away from real development, and that China’s revolt against American economic leadership intensifies every day. If we’re serious about providing our small businesses with the tools they need to be competitive for the challenges ahead, it will require compromise — not digging in to an unyielding, partisan stance. The stakes are too high to devolve into petty arguing.