PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

ICYMI:  SBE Council’s Kerrigan Testifies on the Effects of Current Regulatory Policy and the Importance of Stability

By at 27 September, 2018, 2:10 pm

On September 27, 2018, SBE Council president & CEO Karen Kerrigan testified before the U.S. Senate Committee on Homeland Security and Government Affairs, Subcommittee on Regulatory Affairs and Federal Management, on: “Examination of the Effects on Regulatory Policy on the Economy and Business Growth.”

Kerrigan reported that the current direction in regulatory policy has been very positive for small businesses, and that President Trump’s executive orders on regulatory reform are advancing efforts and real action to reduce and streamline red tape and regulatory course.

She discusses the importance of maintaining a friendly regulatory environment over the long-term, and why broader reform of the regulatory system – including the Small Business Regulatory Flexibility Improvements Act, S. 584, is important to continued small business success and the growth of entrepreneurship.  Read her opening statement below.

Karen Kerrigan

Opening Statement

(To read Kerrigan’s full written testimony, click here.)

Thank you Chairman Lankford and Ranking Member Heitkamp for hosting this important hearing on regulatory policy and its impact on the economy and business growth. I am honored and pleased to be able to represent the Small Business & Entrepreneurship Council (SBE Council) and our members this morning.

And thank you for your work on advancing reforms that will improve and modernize the regulatory process. SBE Council and our members appreciate your leadership in this critical area.

Current regulatory policy and the general direction of policy have been very positive for small businesses.  Entrepreneurs feel liberated that they can focus more intently on growing their businesses rather than being preoccupied by new regulatory threats that could impact costs and competitiveness.

Their positivity is strong, as reported by all the key surveys that measure small business optimism – it is very high – historically high by some measures, and this is not only reflected in how entrepreneurs feel about the general business climate, but also their own business’s bottom line and performance due to increased sales and revenues, and opportunities for expansion. This, of course, has translated into more hiring, investment, improved wages and expanded opportunities for workers.

Our members and small business owners tell us their optimism and the improved business environment are directly tied to federal policy, and one of the key pieces is the change in regulatory policy. Again, it has been a welcome development.

The President’s Executive Orders on streamlining regulation and cutting red tape combined with movement in the Congress on broad regulatory reform, and legislation that has passed focused on specific areas and signed into law (like reforms to improve lending) have made good on the regulatory signals that were sent to small businesses about where federal policy and actions would be headed at the beginning of the new Administration and the 115th Congress. These signals, and subsequent action, have provided a very powerful boost to entrepreneurs and small businesses.

We are very pleased that the agencies are following through on the Executive Orders. In addition, the SBA Office of Advocacy has stepped up to assist with implementation. Their activity, with a focus on small business engagement, is ongoing and has been very effective. And I applaud the acting chief counsel Major Clark for his leadership and work.

While concern about “government regulation” has diminished somewhat for small business owners, it remains a priority issue and challenge for many. So there is still work to be done in this regard, and we believe that – in addition to agencies continuing their efforts to weed out and fix regulatory burdens – Congress can play a big part by finishing the work it has started on regulatory reform. This would be a dynamic sequence that would promote regulatory stability and ensure that robust economic growth continues.

SBE Council is supportive of the reforms bills advanced by the broader Committee, and we are particularly passionate about S. 584, the Small Business Regulatory Flexibility Improvements Act.

The key pieces of this bill to explore and document the rational, objective and legal basis, costs, potential ripple effects and unintended consequences of proposed regulatory actions  – and engaging small business owners in the process – all on the front end, we believe, will produce smarter regulation.  The additions the bill makes to the final regulatory flexibility analysis, providing the chief counsel Office of Advocacy with more tools and power, the periodic review of rules, bringing IRS regs under this process, and providing the waiver of fines for small businesses with respect to paperwork requirements, all add together to make the regulatory process more accountable, transparent and friendly to small businesses.

We believe it is important for Congress and the Administration to stay on a reform-minded path, as regulatory stability and consistency will help to sustain the strong economic growth and confidence we are now experiencing. We need to restore strong entrepreneurship – the data shows that we are on that path – but “psychological scars” from the financial crisis and its aftermath remain with us, which has created an aversion to risk. A long-lasting and strong economic expansion will fuel confidence, which will encourage more people to take the risk of starting a business.  Regulatory stability and a better regulatory system will help greatly in this regard.

Thank you again to all members of the subcommittee and I look forward to our discussion.

You can watch the hearing in its entirety here.

 

News and Media Releases