Robb Mandelbaum ,
The ink was hardly dry on President Donald Trump’s executive order pledging to repeal two existing regulations for every new one when the U.S. Chamber of Commerce announced that it was all in. “The U.S. Chamber applauds the president for fulfilling the campaign’s promise to take on the regulatory juggernaut that is limiting economic growth, choking small business, and putting people out of work,” Chamber president and C.E.O. Thomas J. Donohue said in a press release. “We look forward to working with the administration to identify the regulations doing the most harm and recommend solutions that drive growth and jobs.”
But though Trump signed the executive order ringed by small business owners, dedicated small business advocates were slightly more circumspect. “The implementing rules to be issued by the Office of Management and Budget should emphasize that the extraordinary costs and complexity of regulations falls hardest on America’s small and independent businesses,” said the National Federation of Independent Business, which noted that according to its own research, business owners say regulations “have been in their top three concerns for 96 consecutive months.”
Similarly, the National Small Business Association, which just two weeks ago released a survey claiming that start-up businesses spend $83,000 on regulatory costs alone, said, “We look forward to working with the Administration as the many remaining details and decisions are worked through, to ensure that reducing regulations on smaller businesses will be a top priority and that regulatory policy moving forward is maximally effective for small businesses.”
Only the liberal-leaning Small Business Majority, which in 2012 published its own research finding that regulations come in third among small business concerns, well behind weak demand, had qualms. “In all our conversations with small businesses, the most burdensome regulations are at the state and local level. We don’t hear a big hue and cry about federal regulations,” John Arensmeyer, the group’s president and C.E.O., said in an interview. “Regulations should be considered based on a specific policy objective, not as an abstraction. It’s a simplistic proposal that has no basis in reality.”
On that note, Arensmeyer may be on to something, and the other groups are right to be cautious. “This is more about messaging and less about reality,” said Seth Perretta, an expert tax lawyer who focuses on insurance and other benefits for industry groups and large companies.
As you no doubt have read, the executive order signed Jan 30, 2017 declares that in most cases, “any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations” — and that the “total incremental cost of all new regulations, including repealed regulations, to be finalized this year shall be no greater than zero, unless otherwise required by law.” (“Costs” here appear to refer to the private sector’s burden of complying with regulations rather than the cost to the government of enforcing them.) There’s a wrinkle, though, beginning next year: the White House will set a budget for each agency’s incremental regulatory cost, an allowance that limits total amount of compliance burden that an agency can implement that year — and “the total incremental cost allowance may allow an increase or require a reduction in total regulatory cost.”