Bush Signs E.O. on Regulatory Impacts on Small Business

On August 14, President Bush signed a new executive order that directs federal agencies to establish "written procedures and policies" to "thoroughly review" the potential impacts of new regulation on small businesses, small governmental jurisdictions, and small organizations. These written procedures are meant to promote compliance with the Regulatory Flexibility Act (RFA) of 1980, which requires agencies to perform a special analysis when proposing rules that would have a "significant" economic impact on small entities to look for ways to minimize burden. Agency procedures must be submitted to the Small Business Administration’s (SBA) Office of Advocacy -- which oversees enforcement of the RFA -- within 90 days for review and comment, and issued within 180 days. Currently, many agencies already have established procedures under the RFA, and it’s possible these may simply be recycled for submission to the Office of Advocacy. If that’s the case, Bush's order is unlikely to mean much, as it generally restates what is already required under current law. Previously, in March of this year, the Office of Management and Budget's Office of Information and Regulatory Affairs signed a memorandum of understanding to further reduce regulatory burdens on small business. "Small business" often receives such special consideration in rulemaking deliberations, and is frequently held up as a reason for easing off regulatory protections, as Bush’s E.O. seems to do. Yet as discussed in detail here, the legal definition of "small business" encompasses 99 percent of American businesses employing 51 percent of the private-sector workforce, according to the SBA. Under such an expansive definition, it’s impossible to have strong health, safety, and environmental protections without asking small business to do its part.
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