Federal Agency Culture Shift Nets Astounding Results; Early Attention To Negative Consequences Saves $16.4 Billion

3/12/2002

From: John McDowell of the U.S. Small Business Administration 202-205-6941 or john.mcdowell@sba.gov

WASHINGTON, March 12 -- 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, today delivered to the U.S. House of Representatives, 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. 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 (OMB) 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 (RFA) 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 (OIRA) so that as a team they could "create innovative solutions" to the regulatory problems facing small business.

For more information, and the complete text of the testimony, visit the Office of Advocacy website at http://www.sba.gov/advo.

Created by Congress in 1976, The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The Chief Counsel for Advocacy, who is appointed by the President and confirmed by the U.S. Senate, directs the office. The Chief Counsel advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. Issues are identified through economic research, policy analyses, and small business outreach. The Chief Counsel's efforts are supported by offices in Washington, D.C., and by Regional Advocates. For more information on the Office of Advocacy, visit http://www.sba.gov/advo, or call 202-205-6533.