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RISCH AND GRAVES: How Obama drowns Main Street in regulations
Small businesses are feeling the pinch
A prescription for a more robust American economic recovery is not a mystery — the catalyst of job growth is small business. At a time when small businesses should be at the heart of our nation’s comeback, America’s best job creators deserve leaders who create an environment where businesses can thrive.
President Obama, in his State of the Union address, gave yet another lecture on how critical small businesses are to this country. However, when you dig into it, the facts show this administration is drowning Main Street in regulations at a record pace and increasing costs and uncertainty at every turn while doing little to help promote growth.
The importance of small businesses to our economy is indisputable. They make up 54 percent of the private-sector economy and create about 70 percent of all new jobs. In January 2012, Mr. Obama elevated the Small Business Administration (SBA) to a Cabinet-level agency. This move was heralded as an example of how small businesses were at the forefront of the president’s agenda. However, the administration’s neglect of the SBA has proven otherwise. Earlier this month, the Senate Small Business and Entrepreneurship Committee finally held a nomination hearing for an SBA administrator. The time it took to nominate Maria Contreras-Sweet as SBA head — 11 months after the previous administrator’s resignation announcement — is indicative of the administration’s cavalier view of small business.
The previous administrator, Karen Mills, announced her resignation on Feb. 11, 2013, and since then, the administration has issued 3,854 regulations costing businesses $112 billion. This record pace has been extremely harmful for small businesses, considering their cost to comply with regulations is 36 percent higher than for larger firms. For small businesses, more time and money spent on complying with regulations means that fewer resources are available to grow and create jobs. Yet, this administration continues to pile it on.
The SBA remains the singular federal agency with the sole responsibility for overseeing issues that affect the United States’ 29 million small businesses. As a resource for loans, contracts, business development and counseling, taxpayers expect the agency to assist small businesses when they need it most. Instead, businesses have found extensive delays at the SBA to process the most basic applications. To cite an example, in the wake of Superstorm Sandy, small businesses were unable to get a loan promptly to recover and rebuild because the agency is repeatedly losing applications and documentation. When these businesses approach the SBA for help, they report to our respective committees a pattern of broken promises, missed deadlines and a government that is closed to small business.
Small companies have seen their health care insurance plans cancelled due to Obamacare and the promise of keeping their current coverage broken. Mr. Obama has delayed online enrollment for the Small Business Health Options Program (SHOPs) exchanges for an additional year, and choices within the federal exchanges are limited to just one plan. As a result, these same small businesses find they are victims of more government ineptitude and higher costs for plans that don’t fit their needs.
To fulfill the proper oversight role of Congress over this program, an inquiry request was sent to Health and Human Services Secretary Kathleen Sebelius in January about SHOP enrollment. The administration has released the enrollment numbers for the broader health exchanges, but has remained silent about the small-business exchange run by the federal government. To date, a response has not been received.
Late on Feb. 21, the Obama administration quietly released a study that proved that small businesses were again feeling the brunt of the law. The report, issued by the Office of the Chief Actuary at the Centers for Medicare and Medicaid Services, found that two-thirds of small businesses will see premium hikes under Obamacare. Add this to the long line of broken promises regarding the law.
Larry Katz, CEO of Dot’s Diner in Louisiana, recently testified before the Senate Small Business Committee that he wants to expand his business, but Obamacare is forcing him to close two diners to fall below the 50-employee mandate threshold. As these businesses downsize and struggle to survive, SBA leadership has been nowhere to be found.
As leaders representing small businesses and advocating for their success, we say “enough is enough.” Now is the time for Mr. Obama to fulfill years of unmet promises to this country’s entrepreneurs. Unfortunately, the rhetoric from the president’s State of the Union address does not heal the wounds inflicted on small businesses during his first five years in office. It is time for this administration to put small businesses at the forefront and allow America’s job creators to unleash a robust economic recovery.
Sen. Jim Risch is ranking member of the Senate Small Business and Entrepreneurship Committee. Rep. Sam Graves is chairman of the House Small Business Committee.
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