Tuesday, January 23, 2018
Opinion

Regulations strangling the economy

According to the federal Small Business Administration, the cost of complying with regulations for the typical small business is $10,500 per year, per employee. A firm with 10 workers, for example, must pay more than $100,000 every year just to remain on the right side of the rules imposed by Washington.

That's a drop in the bucket for General Motors or Google, but for the average small business it's an enormous cost that looms over every decision, including whether to hire anyone new, open a new location or purchase equipment and supplies from other businesses that are struggling with the same calculation.

The SBA estimates that the aggregate cost of those rules imposed on the economy is $1.75 trillion per year. Some of them are no doubt necessary. But many are excessive, duplicative or plainly silly. In a good economy they prevent businesses from operating at top efficiency. But in the midst of the longest economic downturn in 80 years, regulations for their own sake are real job killers.

That's especially true in Florida. A 2011 report by Ernst & Young shows that 94 percent of all businesses in the state are organized as so-called flow-through companies, usually sole proprietorships, partnerships or other small operations. The same report estimates that these firms account for nearly 60 percent of all jobs. In other words, Florida's economy depends on small business, and the weight of federal regulations is pressing down on them very hard.

The recession hit Florida harder than most other states, and the recovery has been frustratingly slow. According to the Bureau of Labor Statistics, the unemployment rate here remains higher than the national average, and small businesses are struggling to keep their doors open. Despite that, the federal bureaucracy continues to pile on new regulations, which are certain to cost businesses thousands of dollars more that they could be spending to stay alive, keep their workers or create new jobs.

In fact, federal agencies in Washington are busily preparing more than 4,000 new regulations covering virtually every commercial activity. Do we need thousands more regulations heaped on top of an economy that is already heavily regulated and which has been sputtering for years?

That question is better put to Florida's congressional delegation, led by Sen. Bill Nelson. He's been one of the president's most reliable allies and a supporter of his aggressive regulatory agenda. With all due respect, that has to change.

For starters, Nelson should support legislation that would put a moratorium on new regulations until the economy recovers. Beyond that he should support guidelines that block regulations unless they can pass a simple cost-benefit analysis. Too many are justified on the basis of theoretical arguments that ignore the practical consequences for businesses, consumers, taxpayers and job seekers. Unless the federal government can show measurable advantages, and unless those advantages are proportionate to the real costs, it should be restrained from imposing new burdens on businesses.

We would urge Nelson to remember as well that regulations can't be used as way to circumvent the constitutional process. Early in his term President Barack Obama proposed a controversial cap-and-trade law that would have sharply increased the cost of energy. For that reason Congress rejected it, but that hasn't stopped the administration from writing into the regulatory code new restrictions on power plants, automobiles and machinery that will have the same effect.

That's not what the Founders envisioned. Our system is designed to prevent the executive branch from imposing its will on Americans unless their elected representatives consent.

Whether we need some rules to protect the environment, the public health and safety is not in question. Small business owners agree with the need for sensible regulations. But what's coming from Washington is a virtual tidal wave that threatens to wipe them out.

Nelson and his colleagues have an obligation. They claim to be concerned about jobs and the economy. And their rhetorical support for small business is encouraging. But concern and rhetoric are weak substitutes for action. It's time for the senator and his colleagues to assert their authority over the administration and throttle back on the regulatory machine.

Bill Herrle is the Florida executive director for the National Federation of Independent Business, the country's leading advocate for small businesses with more than 10,000 members in Florida.

Comments
Editorial: A good first step in restoring the right to vote

Editorial: A good first step in restoring the right to vote

Allowing felons a meaningful chance to reclaim their right to vote and rejoin civic life is edging closer to reality in Florida. On Tuesday the state announced that a yearslong petition drive to put a constitutional amendment on the November ballot h...
Updated: 1 hour ago
Editorial: Look hard into Tampa Bay and Pinellas CareerSource CEO, and get to the bottom of the numbers and the money

Editorial: Look hard into Tampa Bay and Pinellas CareerSource CEO, and get to the bottom of the numbers and the money

Something is seriously amiss at Tampa Bay’s two CareerSource agencies, which receive millions in federal and state money to match unemployed workers with local employers. First, the agencies appear to be taking credit — and money — for job placements...
Published: 01/22/18

A Chicago Tribune editorial: Shut down this shutdown habit

"Shutting down the government of the United States of America should never ever be a bargaining chip for any issue. Period. It should be to governing as chemical warfare is to real warfare. It should be banned."— Lamar Alexander, R-Tenn., addressing ...
Published: 01/22/18
Editorial: Beware of social media targeting kids

Editorial: Beware of social media targeting kids

Ignoring all available evidence that screen time and social media exposure can be harmful to kids, Facebook recently unveiled a new messaging app targeting children under 13. It’s yet another battlefront for parents who have to constantly combat the ...
Published: 01/21/18
Editorial: Too soon for Tampa Bay to settle for buses over light rail

Editorial: Too soon for Tampa Bay to settle for buses over light rail

The good news on the transportation front is that Tampa Bay’s government and business leaders are working together like never before to connect the region’s largest cities, attractions and employment centers with a more robust mass transit system. Th...
Published: 01/20/18
Editorial: Saying ‘thank you’ helps Tampa police build needed trust

Editorial: Saying ‘thank you’ helps Tampa police build needed trust

The smiles, applause and at least one hug belied the grim impetus for a gathering last week at a neighborhood center in Tampa — the Seminole Heights killings.The Tampa Police Department held a ceremony to thank those who helped in the investigation t...
Published: 01/19/18
Updated: 01/21/18
Editorial: Criminal charges should finally wake up FSU fraternities to hazing’s dangers

Editorial: Criminal charges should finally wake up FSU fraternities to hazing’s dangers

The death last fall of a 20-year-old Florida State University fraternity pledge revealed pervasive dangerous behavior within the school’s Greek system. Andrew Coffey, a Pi Kappa Phi pledge, died from alcohol poisoning after an off-campus party, and a...
Published: 01/19/18

Editorial: Confronting racial distrust in St. Petersburg, one conversation at a time

The St. Petersburg Police Department’s heavy presence in Midtown on Martin Luther King Jr. Day and the community animosity it stirred have raised a familiar, troubling question: Can St. Petersburg’s racial divisions ever be reconciled?That big ideal ...
Published: 01/19/18
William March: Tampa Bay Democrats line up for state legislative races

William March: Tampa Bay Democrats line up for state legislative races

A surge of Democrats seeking local legislative offices and hoping for a "blue wave" in the 2018 election continued last week, led by Bob Buesing filing to run again versus state Sen. Dana Young, R-Tampa.In addition:• Heather Kenyon Stahl of Tampa has...
Published: 01/19/18

Editorial: State’s warning shot should get attention of Hillsborough schools

The state Board of Education hopefully sent the message this week with its warning shot about the slow pace of the turnaround at Hillsborough County’s low-performing schools.The board criticized the school system for failing to replace administrators...
Published: 01/18/18
Updated: 01/19/18