Early attention saves small business $16.4 million in regulatory compliance costs

Changing the regulatory culture in Washington, D.C., is not easy, but when it happens the results can be astounding. That is the message that Tom Sullivan, Chief Counsel for Advocacy, recently delivered to the U.S. House of Represen-tatives Subcommittee on Energy Policy, Natural Resources, and Regulatory Affairs.

"Regulators are beginning to think about the effects of their proposals before they act, and our experience has shown that this makes for better rules," said Sullivan. He added that these rules are not only "equally effective" in meeting the objectives of a cleaner environment, safer transportation, financial security and improving working families' health and safety, but they also are less costly to the small businesses they regulate.

Sullivan reported that from fiscal year 1998 through 2001, modifications to federal regulatory proposals, based on early consultations by agencies with small businesses, have resulted in more than $16.4 billion in foregone regulatory compliance cost savings. The result is that American small businesses could have hired an additional 96,000 employees or provided more than 1.6 million workers with annual employer-sponsored health insurance.

Sullivan also praised a recent report by the Office of Management and Budget that he said "demonstrates clearly the overwhelming burden placed on the nation's economy and the employers who drive the economy." However, he noted that of the 71 regulations reviewed, many would not be considered "high priority" had the federal agencies involved complied with the Regulatory Flexibility Act and considered the negative effects on small business early in the regulatory process.

Sullivan completed his testimony by vowing to continue to work closely with OMB and the Office of Information and Regulatory Affairs so that as a team they could "create innovative solutions" to the regulatory problems facing small business.

Additional information about the Office of Advocacy can be found online at www.sba.gov/advo.