News From the
Committee on Small Business
Nydia M. Velázquez, Chairwoman

For Immediate Release
February 28, 2008     

CONTACT: Erin Donar/ Jaime Zapata,  (202) 226-3636

Small Business Owners Disagree with Bush Administration on Effectiveness of Paperwork Reduction Act

WASHINGTON, DC — Last year, the Federal Register grew to 70,000 pages, which means small firms across the nation must wade through the equivalent of 39 New York City phone books just to do business.  To the average entrepreneur, this implies countless hours and approximately $8,000 per employee in annual costs.  Today, the House Committee on Small Business evaluated the effectiveness of the Paperwork Reduction Act (PRA).  Members heard very different views from witnesses.  The Administration feels the law is working. Small business owners disagreed and called for revisions to the law. 

“Dealing with sharp increases in paperwork is a challenge for any business, but it is especially difficult for small firms, which have fewer resources than their large counterparts and are regularly placed at a competitive disadvantage by questionable requirements,” said Chairwoman Nydia M. Velázquez.

The Paperwork Reduction Act of 1980 was signed into law to clarify government communications while easing related burdens on American entrepreneurs.  The law established the Office of Information and Regulatory Affairs (OIRA) at OMB, and charged the Administrator with mitigating the impact of federal information requests.  Despite this, small firms now spend 15% more time on paperwork than they did just three years ago.  The Congressional panel raised that point with OIRA Administrator Susan Dudley, and noted that various agency regulations appear inconsistent with current law.

“It is remarkable that the Administration would acknowledge the paperwork burden on small businesses is increasing, yet say the PRA is working and offer no recommendations to fix it,” said Chairwoman Velázquez.

The Committee also broached the role of the Regulatory Flexibility Act (RegFlex) in addressing the underlying problems of the PRA.  RegFlex calls on agencies to conduct analyses on the economic impact that any new regulation would have on small firms.  It further stipulates that significant alternatives to minimize detrimental effects on businesses must be examined.

“It’s time we rescue small firms from the paperwork burden threatening to take them under. We must strengthen the PRA and other related laws, while guaranteeing their effective implementation,” said Chairwoman Velázquez. “Entrepreneurs are the bedrock of the American economy.  We can’t allow unreasonable bureaucratic requirements to stifle their important contributions.” 

Click here to view video clips of today’s hearing.

Click here to read the testimony from today’s witnesses.

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