MSCI Joins Coalition Asking Congress To Ease Regulatory Burden On Small Businesses

According to a recent National Association of Manufacturers (NAM) study on the cost of regulation, the cost per employee to comply with federal regulations is three times greater for small firms than the average costs for all manufacturers.

Because of this disproportionate impact, the Metals Service Center Institute (MSCI) joined the U.S. Chamber of Commerce, the National Federation of Independent Businesses (NFIB), and dozens of other trade associations in sending a letter to leaders of the U.S. House and U.S. Senate Small Business committees requesting reform of the federal regulatory process.

Specifically, the letter asked the lawmakers to “ensure the intent of the Regulatory Flexibility Act (RFA) is fulfilled.” The RFA is a 1980 law that sought to correct the disproportionate burden federal regulations had on small businesses by encouraging regulatory agencies to transparently consider the impact of new mandates on small businesses and to minimize negative impacts without compromising underlying regulatory objectives.

The RFA has not worked as hoped, however.

Loopholes allow federal regulators to bypass the law’s requirements and misrepresent the costs of new mandates on small businesses because the transparency requirements only apply to businesses directly regulated. The law also does not work because judges are not allowed to punish agencies for ignoring small business concerns. Indeed, federal agencies have on numerous occasions failed to comply with requirements under the RFA.

For one two-year period, the NFIB found 28 instances where agencies were cited for lack of RFA compliance. Furthermore, small businesses lack the legal recourse when these problems happen.

To address this problem, MSCI and its allies asked the lawmakers to prioritize legislation that strengthens and closes loopholes in the RFA. “At a time when we are counting on small business growth to enrich communities and bolster America’s economy, we cannot afford to bury free enterprise under red tape emanating from Washington,” the letter concluded.

Read the full letter here.