- About Us
- Resource Center
- My WCOE
A prescription for a more robust American economic recovery is not a mystery — the catalyst of job growth is small business. At a time when small businesses should be at the heart of our nation’s comeback, America’s best job creators deserve leaders who create an environment where businesses can thrive.
President Obama, in his State of the Union address, gave yet another lecture on how critical small businesses are to this country. However, when you dig into it, the facts show this administration is drowning Main Street in regulations at a record pace and increasing costs and uncertainty at every turn while doing little to help promote growth.
The importance of small businesses to our economy is indisputable. They make up 54 percent of the private-sector economy and create about 70 percent of all new jobs. In January 2012, Mr. Obama elevated the Small Business Administration (SBA) to a Cabinet-level agency. This move was heralded as an example of how small businesses were at the forefront of the president’s agenda. However, the administration’s neglect of the SBA has proven otherwise. Earlier this month, the Senate Small Business and Entrepreneurship Committee finally held a nomination hearing for an SBA administrator. The time it took to nominate Maria Contreras-Sweet as SBA head — 11 months after the previous administrator’s resignation announcement — is indicative of the administration’s cavalier view of small business.
The previous administrator, Karen Mills, announced her resignation on Feb. 11, 2013, and since then, the administration has issued 3,854 regulations costing businesses $112 billion. This record pace has been extremely harmful for small businesses, considering their cost to comply with regulations is 36 percent higher than for larger firms. For small businesses, more time and money spent on complying with regulations means that fewer resources are available to grow and create jobs. Yet, this administration continues to pile it on.
The SBA remains the singular federal agency with the sole responsibility for overseeing issues that affect the United States’ 29 million small businesses. As a resource for loans, contracts, business development and counseling, taxpayers expect the agency to assist small businesses when they need it most. Instead, businesses have found extensive delays at the SBA to process the most basic applications. To cite an example, in the wake of Superstorm Sandy, small businesses were unable to get a loan promptly to recover and rebuild because the agency is repeatedly losing applications and documentation. When these businesses approach the SBA for help, they report to our respective committees a pattern of broken promises, missed deadlines and a government that is closed to small business.
Small companies have seen their health care insurance plans cancelled due to Obamacare and the promise of keeping their current coverage broken. Mr. Obama has delayed online enrollment for the Small Business Health Options Program (SHOPs) exchanges for an additional year, and choices within the federal exchanges are limited to just one plan. As a result, these same small businesses find they are victims of more government ineptitude and higher costs for plans that don’t fit their needs.
To fulfill the proper oversight role of Congress over this program, an inquiry request was sent to Health and Human Services Secretary Kathleen Sebelius in January about SHOP enrollment. The administration has released the enrollment numbers for the broader health exchanges, but has remained silent about the small-business exchange run by the federal government. To date, a response has not been received.
Late on Feb. 21, the Obama administration quietly released a study that proved that small businesses were again feeling the brunt of the law. The report, issued by the Office of the Chief Actuary at the Centers for Medicare and Medicaid Services, found that two-thirds of small businesses will see premium hikes under Obamacare. Add this to the long line of broken promises regarding the law.
Larry Katz, CEO of Dot’s Diner in Louisiana, recently testified before the Senate Small Business Committee that he wants to expand his business, but Obamacare is forcing him to close two diners to fall below the 50-employee mandate threshold. As these businesses downsize and struggle to survive, SBA leadership has been nowhere to be found.
As leaders representing small businesses and advocating for their success, we say “enough is enough.” Now is the time for Mr. Obama to fulfill years of unmet promises to this country’s entrepreneurs. Unfortunately, the rhetoric from the president’s State of the Union address does not heal the wounds inflicted on small businesses during his first five years in office. It is time for this administration to put small businesses at the forefront and allow America’s job creators to unleash a robust economic recovery.
Sen. Jim Risch is ranking member of the Senate Small Business and Entrepreneurship Committee. Rep. Sam Graves is chairman of the House Small Business Committee.
Small Business Committee Chairman Sam Graves (R-MO) today released the following statement in support of the Consumer Financial Protection and Soundness Improvement Act (H.R. 3193), which will reform the Consumer Financial Protection Bureau (CFPB):
“This bill strengthens the oversight of CFPB rulemaking by streamlining the Financial Stability Oversight Council’s review of CFPB rules that may not properly safeguard financial institutions. More oversight, accountability and transparency is a step in the right direction. Federal regulations often have unintended consequences for small businesses, and when small companies are affected, that in turn impacts jobs and consumers.”
The Consumer Financial Protection and Soundness Improvement Act allows the Financial Stability Oversight Council to set aside any CFPB rule that may undermine the safety and soundness of financial institutions by majority vote. Additionally, it replaces the CFPB director with a bipartisan five-member panel, and establishes the CFPB’s independence from the Federal Reserve. The bill also strengthens consumer protections in the CFPB’s information-gathering process.Last Congress, the Committee held a hearing with CFPB Director Richard Cordray that focused on the Bureau’s rulemaking process, and its consideration of small businesses impacts when developing regulations.
# # #
# # #
The Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Phil Roe (R-TN), today held a hearing entitled, “Providing Access to Affordable, Flexible Health Plans through Self-Insurance.” During the hearing, members discussed the positive benefits enjoyed by workers and employers participating in self-insured health plans and expressed objections to regulatory efforts that would discourage the use of this important health insurance option.
In his opening remarks, Rep. Roe said, “Employers who manage a self-insured health plan bear the financial risk of providing health benefits to workers. Employers will often work with a third-party to process claims and benefit payments. Many self-insured employers also purchase a product known as stop-loss insurance, a risk management tool that protects employers against catastrophic claims and high costs.”
“It is worth noting just how vitally important this health insurance option has become,” continued Rep. Roe. “Support for self-insurance has grown because it can be tailored to the needs of the workforce and offers transparency to ensure the plan is managed in an efficient and effective way. Just as important, self-insurance helps control health care costs, which can lead to higher wages for workers and more resources for employers to invest in job creation.”
Robert Melillo, an executive at USI Insurance Services, echoed the benefits of self-insurance. “A self-funded program allows a plan sponsor to customize, measure, evaluate, and manage each and every aspect of their benefit plan,” said Mr. Melillo. “I believe a plan sponsor’s choice to self-insure with the use of quality and customizable stop-loss insurance programs is essential if they have any chance of managing their future health care spending.”
Subcommittee members listened to the story of one employer who has been able to offer employees comprehensive, affordable health coverage through a self-insured policy. Wes Kelley is the executive director of Columbia Power & Water Systems, a municipal utility for the City of Columbia and Maury Country in Tennessee.
Speaking from personal experience, Mr. Kelley testified, “Over the past 22 years, our self-funded arrangement has allowed the utility to maintain above average benefits for our employees, dependents, and eligible retirees… These benefits are provided without the employees contributing to the cost of health insurance through their paycheck or otherwise. Furthermore, eligible early retirees and their dependents enjoy the same benefits as active employees.”
Maintaining access to a vibrant self-insured marketplace is a priority for policymakers. Michael Ferguson, president and CEO of the Self-Insurance Institute of America, warned, “The administration may make this option more difficult by restricting the availability of stop-loss insurance. Specifically, it is believed that the federal agencies may ‘interpret’ the definition of health insurance coverage to include stop-loss insurance.” These concerns were confirmed earlier by a 2013 New York Times article citing administration officials interested in discouraging the use of stop-loss insurance.
Chairman Roe urged the administration to abandon such a misguided effort, stating, “The administration must clarify its plans to potentially regulate in this area, and explain the legal basis it has to do so… The employers, workers, unions, and families who rely on these health plans deserve the truth now. Like every American, they were told if they liked their current health care plan they could keep it; they have a right to know whether they too will be on the losing end of the president’s broken promise.”
To learn more about today’s hearing, or to watch an archived webcast, visit www.edworkforce.house.gov/hearings.
# # #
Chairman Sam Graves
Floor Speech on H.R. 2804, The ALERRT Act/Regulatory Flexibility Improvements Act
February 26, 2014
(Remarks as Prepared)
CLICK HERE to view the video
I rise today in support of H.R. 2804, the ALERRT Act. This legislation represents an important effort to bring common sense and transparency to an out-of-control regulatory process that is stifling growth, especially among small businesses.
I am especially pleased that legislation which the Committee on Small Business worked on: H.R. 2542, the Regulatory Flexibility Improvements Act, is incorporated into the ALERRT Act. I want to thank Chairman Goodlatte for working with our Committee on this title of the bill.
For over 30 years, agencies have been required by the Regulatory Flexibility Act, or RFA, to examine the impacts of regulations on small businesses. If those impacts are significant, agencies must consider less burdensome alternatives. However, agencies still fail to fully comply with the law. The result is unworkable regulations that put unnecessary burdens on America’s best job creators – small businesses.
In numerous hearings over the years, the Small Business Committee has heard about the consequences that burdensome regulations have on farmers, home builders, manufacturers and others. Instead of using their limited resources to grow and create jobs, small businesses have to spend more time and money on regulatory compliance and paperwork.
The Regulatory Flexibility Improvements Act will eliminate loopholes that agencies have used to avoid compliance with the RFA. Most importantly, it requires agencies to genuinely scrutinize the impacts of regulations on small businesses before they’re finalized.
Examining whether there are less burdensome or less costly ways to implement a regulation just makes common-sense. Reducing unnecessary regulatory burdens, frees up scarce time, money and resources that small businesses can use to expand their operations and hire new employees.
The Regulatory Flexibility Improvements Act is bipartisan legislation that has the strong support of the business community. It simply requires agencies to do their homework before they regulate. If agencies do their work, more Americans will be working.
I urge my colleagues to support the ALERRT Act. It will make the rulemaking process more transparent and reduce unnecessary barriers to job creation.
# # #
The economic recovery is slow, the labor force has been reduced, and small businesses are losing speed, but there's one area that just keeps growing: federal regulations. There's no shortage of new red tape or of bureaucrats to write new regulations, and small businesses are becoming overwhelmed.
It's time for some common sense from federal agencies. Federal regulations should promote safety without unnecessarily burdening small firms and costing much-needed jobs.
As Chairman of the House Small Business Committee, I've worked for several years now with colleagues of both political parties to update and strengthen the Regulatory Flexibility Act (RFA). The outgrowth of that collaboration is the Regulatory Flexibility Improvements Act. This week, for "Stop Government Abuse Week," the House is scheduled to vote on a regulatory reform bill that includes this legislation — a priority of the Small Business Committee.
The RFA requires federal agencies to assess the economic impact of their regulations on small firms, and if significant, consider less burdensome alternatives. Federal agencies sometimes fail to comply at all, or simply "check the box," fulfilling the letter of the law, while missing the purpose of the law entirely. Their analysis is weak; their solutions unworkable. These agencies must be accountable for the way their rule-writing plays out in the real world.
A small business owner from Wichita, Kansas, Carl Harris, earlier this year testified before the Committee that "…the reality is that far too often agencies either view compliance with the [Regulatory Flexibility] Act as little more than a procedural 'check the box' exercise or they artfully avoid compliance by other means."
That's not acceptable. The economy needs thriving, job-creating small businesses, but excessive and ill-considered regulations too often get in the way of growth. Congress must insist through the provisions of the Regulatory Flexibility Improvements Act that federal agencies can no longer get away with paying mere lip service to the RFA. The law is there to protect small businesses, and these job creators deserve those full protections, as Congress designed.
The point of the RFA is to ensure agencies examine how the regulations will affect small businesses and get the input of those who have to live with the requirements before putting a rule into effect. If agencies followed the spirit of the RFA, they would effectively work with — not against — America's 28 million small businesses. As Harris said in his testimony, "Agencies should seek to partner with small entities to help create more efficient, more effective regulations and, in so doing, reduce the compliance costs for small businesses."
The bipartisan Regulatory Flexibility Improvements Act, now Title III of the ALERT Act, updates the RFA's requirements and provides new tools to ensure compliance from regulating agencies. Among these key provisions, the bill requires all agencies to convene small business review panels to get input before proposing rules that will have a significant impact on small businesses. This way, small firms have a chance to be involved in the development of regulation on the front end before they have to live with it on the back end. Additionally, the bill requires agencies to consider the economic impacts more thoroughly, by assessing indirect impacts from regulations — the ripple effect — not merely the immediate or direct effect.
In September, 125 small-business groups and organizations signed a letter voicing the strong support of the small-business community for this legislative effort. Moreover, a U.S. Chamber of Commerce small-business survey revealed that regulations are among the top concerns of small businesses, only exceeded by the requirements of the health care law — further justifying the legislative fix.
Small businesses bear a heavy regulatory cost without the same resources in personnel or expertise as larger companies. In fact, in 2010, the Small Business Administration's study found that regulations cost small companies an average of $10,585 per employee, and compliance costs were 36 percent higher than large companies. The same study found that regulations cost the U.S. economy $1.75 trillion annually.
Regulations are mounting up, and the pace of new rule-making has reached record levels in recent years, with 2012 the costliest year on record. That regulatory pace is unsustainable for a healthy economy. The common sense provisions of this small-business legislation will encourage smarter, better regulations that avoid stifling growth, innovation and job creation. If the federal agencies can do their work as the law requires, then more Americans will be working for our nation's best job creators: small businesses.
The Greater Opportunities for Small Business Act of 2014 will increase the federal government goal for small business contracting percentage from 23 percent to 25 percent, and the Contracting Data and Bundling Accountability Act of 2014 will bring more transparency to data reported on bundled and consolidated contracts. When many small contracts are combined into one large contract, many small businesses are left at a disadvantage when bidding. Both bills will work to create a more even playing field for small contractors.
“These two pieces of legislation will go a long way towards increasing opportunities for small companies who want to grow and create jobs by doing business with the federal government,” said Chairman Graves. “By increasing the federal-wide goal for contracts to small businesses, and requiring greater accuracy, transparency and accountability in contract bundling and consolidation, we make it easier for small businesses to enter this marketplace and compete for contracts. The federal government spends nearly half a trillion dollars on contracted goods and services, therefore, we must ensure that the money is being spent efficiently, and small businesses have proven that they can do quality work cheaper and often faster.”
During Chairman Graves’ leadership, the Committee has successfully spearheaded small business contracting legislation that has become law. The National Defense Authorization Acts of 2013 and 2014 incorporated several Committee-sponsored contracting provisions, including making the small business goals part of senior agency employee reviews and bonus discussions, preventing contracting fraud by penalizing companies that front for large businesses, and changing limitations on subcontracting to make it easier for small companies to team on larger contracts.
Details of the legislation:
Greater Opportunities for Small Business Act of 2014:
• The federal government spends about $460 billion in contracting each year, with a goal of awarding 23% of prime contract dollars to small businesses.
• This legislation raises the small business contracting goal from 23% to 25%. Raising the goal by 2% means a substantial amount of new business for small businesses – about $10 billion worth.
• The federal government has missed this goal for seven consecutive years, but past success proves it is achievable.
• The legislation also ensures opportunities for small businesses as subcontractors, with a goal of awarding 40% of all subcontracted dollars to small businesses – an increase from the current goal of 35.9%. The new goal will go into effect once the subcontracting reforms in the FY 14 NDAA are fully implemented.
• The bill also promotes accurate reporting, by requiring that only prime contract awards can count towards the prime contract goal.
Contracting Data & Bundling Accountability Act of 2014:
• Recent GAO reports and Committee hearings have brought to light that the data on contract bundling and consolidation reported each year is seriously flawed. Some agencies claim not to have bundled a single contract in the 17 years since the original contract bundling legislation passed, but even a brief examination of contract practices suggests otherwise.
• This legislation requires the Small Business Administration (SBA) to work with other agencies to create and implement a data quality improvement plan to promote greater accuracy, transparency and accountability in the reporting of contract bundling and consolidation. It then requires GAO to assess the agencies’ success, and offer suggestions for further improvement.
• Properly labeling a contract as bundled or consolidated is incredibly important to small business competition, since the act of labeling the contract is what triggers a series of reviews and mitigation steps intended to promote opportunities for small businesses.
The ObamaCare credibility gap continues to grow as new evidence of broken promises comes to light. Despite the administration’s repeated pledge health care reform would not harm employment, the New York Times reports teachers and school workers are already experiencing cuts to hours and income thanks to the president’s fatally flawed law:
The House Committee on Education and the Workforce has heard similar stories from teachers, professors, and school workers nationwide. The president’s health care law is hurting America’s students and threatening the strength of our nation’s education system.
Whether you are a student, parent, teacher, professor, or administrator, policymakers need to hear from you about the law’s effect on your local schools. To share #YourStory, visit www.edworkforce.house.gov/YourStory or e-mail the committee at TellYourStory@mail.house.gov.
# # #
© 2013 Women Construction Owners & Executives | firstname.lastname@example.org