Rob Smith, Senior Attorney for NFIB’s Small Business Legal Center, testified before the U.S. House Committee on Small Business in a hearing titled “Burdensome Regulations: Examining the Biden Administration’s Failure to Consider Small Businesses.” Smith discussed the financial and negative impact government regulations and red tape have on small businesses.
Smith testified: “The RFA was meant to address the disproportionate impact of federal regulations on small businesses. Unfortunately, it is no longer effective in achieving this goal. Administrative agencies have figured out how to bypass the law’s requirements, take advantage of loopholes, and engage in faulty cost analyses."
He continued, "The key to remember about overregulation is that a small business owner does not suffer from each new regulation in a vacuum. Each new regulatory burden compounds and layers on top of the existing regulatory requirements until the pressure is too much to bear. The reality is that the current burdensome regulatory path is unsustainable, and something has to give."
Smith emphasized the need for legislative action: "Small businesses are looking to this body for help in strengthening the RFA, ensuring agencies comply with the law, and easing the regulatory burden they face. They need relief and they need it fast. Passing the Prove It Act of 2024 would be a good first step.”
According to NFIB research, small business owners regularly rank ‘unreasonable government regulations’ as a top concern in operating their businesses. NFIB has consistently supported measures that would address this regulatory burden faced by Main Streets nationwide, such as the Prove It Act which aims to remedy loopholes in the Regulatory Flexibility Act (RFA) and reduce red-tape for small businesses.
Smith previously authored a White Paper on the RFA, exploring its importance, lack of compliance by administrative agencies, and potential actions Congress can take to reinvigorate it.
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