American Elephants

The Regulatory Burden on Small Business is Estimated to Be $1.75 Trillion Annually. by The Elephant's Child

One of the biggest whoppers in Obama’s Kansas ‘fairness’ speech was his claim that tax cuts and deregulation have “never worked” to grow the economy. This is absurd. Countries with greater economic freedom consistently produce greater overall prosperity. President Reagan’s program of lower taxes and deregulation led to a two-decade  economic boom.

The Small Business Administration says that the regulatory burden on our economy is a staggering $1.75 trillion annually. If it were implemented correctly, cutting the regulatory burden would provide a cost-free stimulus almost immediately. Cass Sunstein, who heads up the Office of Information and Regulatory Affairs, calls it an “urban myth”, though the methodology from which those numbers are derived are widely accepted. Well, that’s what Democrats do — regulate.

Wayne Crews surveys the growth of the regulatory state every year in a report called Ten Thousand Commandments, every year since 1996. Over that span, he has seen the number of pages in the Federal Register grow from 67,000 to 81,405. Each page contains a rule that imposes costs on businesses. Owners usually give up and hire someone to handle compliance when they reach a size of about 30 employees. The costs of complying with regulations average $10,585 per employee, the SBA says.

The Chamber of Commerce surveys show that over 60% of small businesses have no plans to hire in the next year, and firms point to greater regulation or the threat of it as a major reason.

— The federal plumbing police are reviewing water efficiency standards for urinals, last reviewed in 1998. The DOE must, according to law, allow the states to toughen the requirements if the feds don’t do it  within 5 years. This can be found in the Energy Conservation Program for Consumer Products Other Than Automobiles which also regulates the efficiency of toilets, faucets and showers. Add refrigerators, freezers, air conditioners, furnaces, dishwashers, light bulbs and more.

Urinals are also regulated by the Occupational Safety and Health Administration, which requires one urinal for every 40 workers at a construction site for companies with less than 200 employees, and one for every 50 workers where more than 200 are employed.  The Americans With Disabilities Act also controls the proper dimensions and placement of bowls.

— A family farmer in California grows almonds and walnuts on about 40 acres. He has to deal with the state Water Resources Control Board which allows him rights to 405 acre-feet of water a year.  The state Department of Pesticide Regulation requires reports on what he uses for navel orangeworm and husk fly and codling moth. If he didn’t do it himself with state certification, there would be other safety rules.  The San Joaquin Valley Air Pollution Control District  issues permits for burning pruned limbs. There’s the state and federal Occupational Safety and Health, and the state Employment Development Department which require paperwork for the farm’s one employee. There’s the Spill Prevention Control and Countermeasure Plan for above-ground petroleum tanks. Of 81,500 farms and ranches, ¾ sell less than $100,000 of crops and commodities.

Another farmer near Modesto has 450 acres in almonds and walnuts. During harvest time he’s required to keep down the dust.  So he went looking for a 2,000-gallon water truck, and found a nice one that fit the bill. The dealer couldn’t sell it to him without costly modifications because the California Air Resources Board was cracking down on emissions from diesel trucks.

— From the other side of the country, the crew of Carlos Rafael’s 76-foot steel dragger fishing boat captured a giant bluefin tuna in their trawl gear while fishing offshore. Rafael immediately called a bluefin tuna hot line maintained by fishery regulators to report the catch. These fish are highly prized in Japan. A 754 lb. specimen fetched a record price in Tokyo, selling for nearly $396,000.

When Rafael met the boat in Provincetown, agents from NOAA’s Office of Law Enforcement informed him they were confiscating his fish, all 881 pounds of it.  Even though the catch had been declared and the boat had a tuna permit, the rules do not allow fishermen to catch bluefin tuna in a net.  They said it had to be caught with a rod and reel.  After being towed in the net, the fish was already dead.  A public affairs specialist with NOAA said the fish has been forfeited and will be sold on consignment oversees. If it is determined that there was a violation the money will go to the asset forfeiture fund.

— New rules proposed by the U.S. Department of Labor aim to protect children’s safety in a dangerous industry — family farms. They intend to restrict the chores children can be hired to perform like driving a tractor or rounding up cattle in corrals on horseback. The rules would bar young people under 16 years of age from operating power equipment, branding or breeding farm animals or working on ladders higher than 6 feet. Under the regulations a rancher wouldn’t be able to hire local kids to move hay  or pull the grain cart at harvest time. Farm injury rates have declined 59% from 1998 to 2009.  Current labor laws allow children under 16 to work on farms when they aren’t in school but limit the tasks they can do.

Lorinda Carlson, who owns a small orchard in Chelan County WA, said the law would make it harder to hire the five 13-15 year-old workers who usually help her load cherries during harvest season, a job few adults are willing to do.

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[…] Sales are weak. Fed Ex has announced planned  layoffs. The regulatory burden on small business is estimated by the Small Business Administration to be over $1.75 trillion […]


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