Small Business Commits to Fighting Regulation

National Federation of Independent Business is pushing back against the onslaught of new regulations.

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When America thinks about what the federal government costs—an exercise just completed as part of the effort to raise the federal debt ceiling—it usually thinks only of taxes. But there is another, hidden cost to the economy—one that prevents the creation of new jobs and new businesses year after year after year.

The total federal regulatory burden is difficult to calculate, but its effects are readily apparent. Americans for Tax Reform, the protaxpayer group that has for years been trying to quantify it, estimated that, for 2010, the total cost of the federal government consumed 63.41 percent of national income.

[See a slide show of 10 ways to create jobs.]

To put it another way, Americans for Tax Reform pegged "Cost of Government Day" as falling on August 19, meaning that working Americans had to "toil 231 days out of the year just to meet all costs imposed by government"—eight days more than in 2009, and more than a month later than in 2008.

Make no mistake about it: Whatever the benefits, government regulation imposes very real costs on businesses and individuals who must expend capital that might be used for savings, new investment, or reinvestment, on the costs of complying with regulations that are, in more than a few cases, quite expensive, of dubious merit, and, at times, contradicting the mandates imposed by other agencies. [Report: Obama administration added $9.5 billion in red tape in July.]

It’s a mess, one that deserves to be examined closely—especially with thousands of new regulations just over the horizon as Obamacare prepares to go into effect in 2014.

Pushing back against the onslaught of new regulations is the National Federation of Independent Business, which announced a new effort Wednesday: "Small Businesses for Sensible Regulations," to be led by former U.S. Sen. Blanche Lambert Lincoln.

"Small businesses have long carried a disproportionate share of the federal regulatory burden," the Arkansas Democrat—who lost her seat in 2010 as part of the backlash against Obamacare—said. "There are more than 4,200 new environmental, financial, labor, and other regulations pending at the federal level today, which are causing uncertainty and ultimately harming small businesses and their ability to create jobs." [See 5 upsides to the lousy job market.]

The regulatory environment is presenting major challenges to America’s small business community, said NFIB President Dan Danner, who said the current climate ensures that "small businesses are not doing what they do best"—creating jobs and helping to fuel an economic recovery.

The new initiative, which is beginning in six states—Florida, Nevada, North Carolina, Ohio, Pennsylvania, and Virginia—is backed by more than 150 local and regional businesses seeking to ensure, the group said in a release, "that the administration includes independent analysis of the long-term impact of federal regulations on jobs, economic growth, and other indirect costs, like retaining American industries in the federal regulatory process moving forward."  [Check out political cartoons about the economy.]

Over the next several months, Danner and Lincoln explained at a Wednesday press event, the coalition would be working to bring the personal stories of those who have experienced economic hardships as a direct result of federal regulation to light.

The regulatory argument is not one-sided; there are costs as well as benefits to be considered. All too often, the only time the American people hear about regulations is when they are proposed and being debated. They hear too little, and often too late, about the consequences after they go into effect and whether or not they did anything to solve the problem they were intended to address, something this new coalition hopes to change.

  • See a collection of political cartoons on the economy.
  • Read about why corporate tax reform might be coming soon.
  • See how the debt ceiling debate might affect voters next year.