News From the
Committee on Small Business
Nydia Velázquez, Chairwoman

For Immediate Release                       CONTACT:  Alex Haurek; Duncan Neasham
May 7, 2009                                                                                  (202) 226-3636

Velázquez Calls for More Small Business Input in Regulatory Reform

WASHINGTON, D.C. —As the Administration moves forward to reform how new regulations are approved, the Chairwoman of the House Small Business Committee (D-NY) is calling for a stronger voice for small businesses in the federal rulemaking process. In a letter sent to Peter Orszag, the Director of the Office of Management and Budget, Rep. Nydia M. Velázquez (D-NY) said federal officials charged with overhauling the nation’s regulatory system should pay careful attention to entrepreneurs’ needs.

“All too often federal agencies overlook the unintended impact their regulations have on small businesses,” Velázquez said. “To create an environment that fosters entrepreneurship, the regulatory system must be responsive to small business needs.”

In her letter, Velázquez said the Office of Information and Regulatory Affairs (OIRA) should continue playing an active role in vetting proposed regulations. The Office helps ensure that federal agencies adhere to laws requiring them to take into account the effect new regulations might have on small businesses and offer less burdensome alternatives for compliance.

“In a scramble to meet deadlines, agencies rushing to make new regulations brush small businesses’ voices aside too often,” Velázquez said. “As agencies craft new rules, it is important that there be a formal step in the process that requires close consideration of how small firms will be affected.”

Velázquez also suggested engaging the Small Business Administration’s (SBA) Office of Advocacy earlier in the regulatory process. The SBA’s Office of Advocacy and OIRA work hand in hand to make sure federal agencies comply with the law and minimize the burden to small firms. The available evidence suggests that unnecessarily burdensome regulations place small businesses on an uneven playing field, making it difficult for them to compete in the marketplace. Studies show small businesses bear a disproportionate share of the federal regulatory burden, incurring costs that are often 45 percent greater than those for larger firms.

“When agencies avoid their responsibility to consider the impacts of new regulations on small businesses, the result is more red tape and higher costs that ultimately hold back our entrepreneurs,” Velázquez said. “In this economy, we need to be more sensitive to small businesses’ needs, not less.”

In January, President Obama directed the Office of Management and Budget to prepare a series of recommendations for a new executive order on the Federal regulatory review process. A copy of Velázquez’s letter is available by clicking here.

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