Firms Urge Agencies to Revamp Outdated Regulations

A handful of government departments and agencies should revisit particularly onerous regulations affecting small businesses, the Small Business Administration's Office of Advocacy said at a Wednesday news conference at the National Press Club.

The office accepted more than 80 "constructive" suggestions for its Regulatory Review and Reform (r3) initiative offered by members of the small business community, according to Thomas Sullivan, chief counsel for Advocacy. However, some reform proposals that were not included in this mix suggested getting rid of the Environmental Protection Agency or redoing the nation's tax code.

Sullivan noted that small firms annually pay 45 percent more per employee to comply with federal regulations than big businesses do.

Among the top 10 rules that the Advocacy office has deemed ready for review and reform is a plea to the EPA to update air monitoring rules for dry cleaners to reflect current technology. Most of the 28,000 dry cleaners across the nation are small businesses, but current testing regulations are outdated and don't consider modern dry cleaning equipment, said Dan Nickey, a panelist and program manager of the Iowa Air Emission Assistance Program, which helps small firms comply with air quality regulations.

Wayne Crews, vice president for policy and director of technology studies at the Competitive Enterprise Institute, highlighted that federal regulations cost the U.S. economy $1.1 trillion annually - a number greater than Canada's gross domestic product.

"Tackling these reforms is tough. You may feel like you're trying to catch Moby Dick with a rowboat and tartar sauce," quipped Crews, leading Sullivan to reply, "Well, maybe with r3 we'll at least have a harpoon."

Josh Levine, owner of Electra Entertainment, a local disc jockey entertainment firm, spoke in support of asking the IRS to simplify the home office business deduction, saying the calculations for the deductions are confusing and don't account for technological changes affecting the way business is conducted today. The issue has seen a recent groundswell of support, boosted this year by National Taxpayer Advocate Nina Olson who suggested a standard home-office deduction in her report to Congress.

Other small business requests include asking the Federal Aviation Administration to update Washington, D.C.-area flight rules, which were changed after the Sept. 11, 2001 terrorist attacks. A number of small airports in the restricted say that they likely will go out of business if the FAA finalizes certain rules. The airports argue that the restrictions already have caused a significant economic impact on the D.C. region.

Sullivan said the agencies contacted to implement reforms have been receptive or at least he has "not had any negative reactions." He said that every six months the office would publish on the r3 Web site any efforts the affected departments and agencies had made in response to the small businesses' requests.

By Sharon McLoone |  February 29, 2008; 1:45 PM ET Policymakers
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