PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Federal Policy Roundup: Executive, Legislative & Regulatory Update

By at 4 June, 2024, 11:52 am

by Karen Kerrigan –

A range of policy and legislative initiatives are moving through Congress and the regulatory agencies that will impact small businesses – for good and for bad. Here’s the latest roundup, but check back frequently for more!

Privacy Legislation Moving in the Wrong Direction: SBE Council joined two coalition letters expressing concern and opposition to the American Privacy Rights Act (APRA) to establish a federal regulatory framework for privacy. SBE Council has long-supported a federal framework, as the complexity and cost of a 50-state system would be overwhelming for small businesses. However, the path being pursued in the APRA would have harmful consequences for small businesses, the U.S. economy, and America’s technological leadership. As noted in a joint letter from various business organizations, led by the U.S. Chamber:

“APRA would subject businesses, innovators, and entrepreneurs to more than ten new private causes of action. Similar private rights of action laws have driven away legitimate business in states that have implemented this ill-conceived remedy. APRA would empower plaintiffs’ attorneys to engage in sue-and-settle tactics against small businesses, startups, and charities. Companies acting in good faith and not engaging in willfully harmful activity will be forced to agree to pay expensive settlements or risk costly litigation. APRA would also gut arbitration agreements and enable activists to weaponize private rights of action against non-profit organizations with whom they may disagree politically. In addition, APRA would fail to establish a single, national privacy standard which is necessary to ensure certainty for both businesses and consumers. The APRA’s approach cost the American economy as much as $1 trillion, with $200 billion being incurred by small businesses alone because of its failure to adequately preempt state law.”

In addition, SBE Council signed a coalition letter as a member of the Main Street Privacy Coalition that expressed opposition to the current APRA draft. The letter points out specific concerns related to the private right of action provision, preemption, and more.

SBE Council Supports CRA Resolution to Nullify DOL’s “Walkaround Rule”: SBE Council signed a coalition letter (linked here) along with 59 business organizations in support of a Congressional Review Act (CRA) resolution, introduced by Rep. Mary Miller (R-IL) to nullify OSHA’s worker walkaround final rule.  As a reminder, the rule allows union organizers, community activists, or other third parties to accompany OSHA safety and health officers on an inspection of a workplace if as few as two employees request they do so.

The letter explains that the rule will result in individuals with possible agendas to use the inspection process – which would redirect OSHA inspections away from health and safety – and put OSHA inspectors in the middle of labor disputes. The rule provides no limitations on how many representatives can join the inspection and provides no guidance on how inspectors are to prioritize, approve, or manage employee requests. Finally, it violates workers’ right to choose their workplace representatives in a free and fair representation election as required by federal labor law.

DOL Urged to Delay Implementation of the Final “Overtime Rule”: SBE Council joined 86 other business organizations in sending a letter to the DOL urging officials to delay (until September 1, 2024) implementation of the first increase to the minimum salary threshold in its new overtime final rule. The current effective date is July 1, 2024, providing small businesses with only 60 days to come into compliance.

Comments Filed with the Fed on Capping Debit Interchange Fees: In comments filed with the Federal Reserve, SBE Council expressed concern about the known and unintended consequences of their recently proposed rule to further lower the cap on debit card interchange fees from 21 cents to 14.4 cents per transaction. As noted in the comments: “We have seen the harm interchange caps have had on small businesses before. In the aftermath of the 2010 financial crisis, the Fed capped debit card swipe fees to ‘help’ create cost savings for small businesses and consumers. But it did exactly the opposite. Under the Durbin Amendment, it became harder for the community financial institutions many small businesses depend on to cover their operating costs. As a result, big and small banks were forced to eliminate debit card rewards, limit free checking, and increase account minimums. Not only did this make it harder for consumers to access banking, but it also put small businesses at a competitive disadvantage.”

USTR Roundtable on Supply Chain Resilience: SBE Council chief economist Raymond J. Keating served as a panelist during a virtual public hearing on Promoting Supply Chain Resilience on May 23rd, hosted by the Office of the United States Trade Representative (USTR). The USTR has been requesting comments and holding public hearings focused on advancing U.S. supply chain resilience in trade negotiations and enforcement. Keating pointed to the need to return to policies rooted in sound economics. That is, getting back to advancing tax and regulatory relief, and a free trade agenda whereby governmental obstacles and costs to trade are reduced, with the resulting benefits including diversified and strengthened supply chains. Among the points made by Keating:

“It’s odd that supply chain issues somehow have been twisted against free trade agreements. That doesn’t make much sense if we’re looking to diversify and strengthen supply chains.”

He highlighted the importance of small businesses in trade: “Keep in mind that since nearly every import into the U.S. is an input to a domestic business, then imports are central to supply chains.”

Keating said policymakers should avoid “the impossible task of trying to, for example, micro-manage, subsidize or guide current, emerging and future businesses making up sprawling and dynamic supply chains across industries.”

Read his full statement here.

The Big Problem with Hikes on Tariffs – American Consumers and Small Businesses Feel the Pain: Following an announcement by the Administration that there would be tariff extensions and increases on assorted goods from China, SBE Council chief economist Ray Keating penned a Small Business Insider blog post on how they would hurt American consumers. Keating writes: “The U.S. economy overwhelmingly is a small business economy, and when policymakers impose increased costs – such as via tariffs – there’s no way to get around the fact that small businesses will be harmed.”

FTC’s Disparate Action Versus US Businesses Harms the Startup Ecosystem: In a Small Business Insider blog post, SBE Council chief economist Ray Keating dissects assorted ills in the prevailing hyper-activism of antitrust regulation, noting that the ills hurt entrepreneurs and small businesses. He looks at the case of Amazon-iRobot, and notes that the U.S. House Oversight Committee – led by Chairman James Comer (R-KY) – has justifiably launched a probe into the FTC’s role in the merger’s collapse. Following an announcement that the companies would abandon the merger, iRobot announced it would cut about 31% of its workforce, or 350 jobs. Sadly, this is the type of activity (mergers being abandoned along with such negative consequences) that FTC Chair Lina Kahn has trumpeted as being “wins” for the federal government.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council

 

 

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