March 30, 2017
By Arianna Skibell
As the GOP continues its deregulatory push, lawmakers are turning their attention to small businesses.
Committees in both the House and the Senate weighed the impact of regulations and paperwork requirements yesterday on businesses that they say are disproportionately hurt by the rulemaking process.
The Senate Small Business and Entrepreneurship Committee discussed the Regulatory Flexibility Act, which directs agencies to convene small-business review panels to determine potential impacts of rules. It also mandates that agencies identify alternative regulatory approaches for small businesses. (Link to video. Hearing starts at 19:10 mark)
Chairman James Risch (R-Idaho) said agencies don’t always comply with the law.
“The poster child is the Waters of the United States rule,” he said. “When the rule was proposed, incredibly the agency said that rule would not significantly impact small businesses. We all, particularly in the West, know how untrue that is.”
Randy Noel, first vice chairman of the National Association of Home Builders, echoed the popular conservative viewpoint that Congress needs to take back authority from the executive branch.
“Agencies regularly neglect input from the regulated community,” he said. “We must restore congressional oversight authority to the process.”
But Frank Knapp, president and CEO of the South Carolina Small Business Chamber of Commerce, said regulations can help small businesses compete with big companies and shield them from unfair competition.
The problem is not the rulemaking process, but rather that agencies lack resources to execute it properly, said Knapp, who also co-chairs the American Sustainable Business Council.
Sen. Heidi Heitkamp (D-N.D.), ranking member on the Subcommittee on Regulatory Affairs and Federal Management, questioned witnesses about legislation she is working on and asked lawmakers to work together.
“This adversarial relationship that presupposes that people don’t have the same goals of clean air and clean water,” she said, “can we do this in a way that we can trust each other a little bit?”
Heitkamp’s proposal would force agencies to issue more advanced notices of proposed rulemakings, but she wanted to ensure that would not harm small businesses.
Across Capitol Hill, the House Small Business Committee examined ways to reduce paperwork.
The panel heard suggestions including exempting small businesses from penalties for violating paperwork requirements of environmental regulations and eliminating duplicative reporting requirements.
Chairman Steve Chabot (R-Ohio) stressed the importance of the Paperwork Reduction Act, especially at tax time.
“While the burden of federal paperwork is felt year-round by individuals and small businesses, there is no more relevant time to discuss federal paperwork than the weeks leading up to Tax Day,” he said at the hearing.
Lawmakers have long been concerned that paperwork has grown with the number of federal programs.
In the 1960s and ’70s, Congress held hearings to examine the Federal Reports Act of 1942, which aimed to reduce paperwork. And in 1980, Congress passed the Paperwork Reduction Act, or PRA.
The law established the Office of Information and Regulatory Affairs within the White House Office of Management and Budget. The OIRA chief is tasked with implementing the PRA by reviewing and approving paperwork that seeks to collect information and coordinating related processes. President Trump has yet to pick an OIRA director.
But critics of federal regulations and some industry leaders maintain the paperwork law hasn’t provided relief.
Leah Pilconis, environmental law and policy adviser at the Associated General Contractors of America, works with U.S. EPA and other agencies that interpret and implement environmental laws. Her firm represents more than 26,000 construction contractors, suppliers and service providers.
EPA’s information collections take an enormous toll on the industry, she said. Under the PRA, the term “burden” is defined broadly, she said, leading agencies to chronically underestimate the burden their requests impose.
Pilconis suggested a number of possible reforms, including one that would streamline lead-based paint reduction programs. She said the Occupational Safety and Health Administration requires the construction industry to ensure all surfaces are as free “as practicable” of lead dust.
Yet EPA has a separate lead program, and so does the Department of Housing and Urban Development.
“EPA should recognize that the OSHA rules protect the spread of lead-paint dust during all construction and terminate its efforts to expand current regulations to cover [Lead Renovation, Repair and Painting Rule] work in public and commercial buildings,” Pilconis said in her testimony.
Sam Batkins, director of regulatory policy at the nonprofit American Action Forum, said agencies could begin to tally the costs of paperwork and not merely count the hours it would take. They should also be required to meet paperwork-reduction goals from Congress.
Agencies, he added, could move more reporting online and work to include public participation for new collection processes.
But Sally Katzen, professor and distinguished scholar in residence at New York University School of Law and a former OIRA administrator in the Clinton White House, said Congress adds to paperwork requirements by requiring agencies to base rulemaking off the best data available.
“Where are they going to get it from?” she asked. “It does add to the paperwork burden every time.”
Rep. Dwight Evans (D-Pa.) teased Katzen, asking if she meant to say that Congress is the problem.
“I would rather say, sir, that Congress is part of the solution,” she said.
Katzen also cautioned that while reducing paperwork burdens is important, efforts could have unintended consequences.
“Regulations, like paperwork, are not the same. They don’t have the same purposes and don’t have the same effects,” she said. “Reduction in formation can lead to reduction in protections. Those are choices.”
Ranking Democrat Nydia Velazquez of New York asked Katzen how agencies would be able to make educated decisions about which requirements to toss in light of Trump’s federal hiring freeze and budget cuts.
“It’s particularly concerning because so many of the departures from the civil service are at the senior ranks where they have the expertise,” Katzen said.
She added that the budget cuts will make it harder for agencies to pay for analyses of what’s working well and what’s not.