Letter of Support: Rep. Ribble's Restoring Economic Certainty Act, H.R. 1281
Dear Congressman Ribble,
On behalf of more than 1.7 million Americans for Prosperity activists in all 50 states, I write to applaud you and your colleagues for introducing the Restoring Economic Certainty Act of 2011, H.R. 1281. American businesses are subjected to more costly new regulations every day at a time when continued economic uncertainty and stagnation make those costs increasingly difficult to bear. Your bill pauses the regulatory binge, allowing a two-year moratorium on new regulatory rulemakings and requiring bureaucrats to openly account for the deep economic costs of such regulations.
Compliance with federal regulations is a hidden tax on American businesses. When a business is forced to spend its time and resources on ensuring compliance with environmental and workplace restrictions, paying licensing and permit fees, or filling out mandatory federal paperwork, costs are imposed that sap resources from the company’s other operations. In fact, a recent study by the U.S. Small Business Administration Office of Advocacy showed that in 2008 these compliance costs amounted to nearly $1.75 trillion, or 14 percent of that year’s GDP.
That same study also found that such costs fall disproportionately on small businesses. Whereas the cost of federal regulations was $7,700 per employee for large businesses, for small businesses those costs were over $10,500 per employee. Small business owners have certainly noticed: in a recent survey from the National Federation of Independent Businesses, owners ranked government regulations and red tape as the second most important problem facing their business this year, behind only continued poor sales.
While this $1.75 trillion burden in direct regulatory costs is hard to bear, the uncertainty that results from continually changing the rules of the game is in itself a cost to business. Instead of worrying about costly new rules coming from Washington, businesses should be able to focus their attention on finding opportunities to grow their companies. But with so many new regulations in the pipeline with unclear and uneven impacts on American businesses, owners understandably remain reluctant to invest in new equipment, facilities, and employees.
Despite this, at the request of the Obama administration, federal agencies from the EPA to the USDA are continuing to press ahead with costly new regulations that promise to be a further headache for the nation’s job-creators.
Your regulatory moratorium, on the other hand, would provide exactly the kind of relief American business owners need: certainty and confidence that Washington bureaucrats will stay out of their way, allowing them to focus on putting their business (and the economy) back on track. After the two-year moratorium period is up, all federal rulemakings will be required to be accompanied by an economic impact statement, making explicit the regulation’s total annual costs and benefits and its net impact on American jobs. The bill smartly allows for some exceptions in the case of emergency situations, but those situations are narrowly defined and waivers will only be granted in the case of an “imminent threat to health or safety or other emergency” or when it is “necessary for the enforcement of criminal laws.”
Americans for Prosperity is proud to support your legislation at a time when American businesses need regulatory relief and certainty more than ever. I urge your colleagues to support its passage, and I look forward to working with you in the future.
Director of Government Affairs
Americans for Prosperity