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STATEMENT

Of the Honorable Nydia M. Velázquez, Ranking Member

Committee on Small Business

Full Committee Markup of HR 2542, the Regulatory Improvements Act of 2013

September 18, 2013

Thank you, Mr. Chairman.  I think all members of this committee recognize the importance of having a regulatory process that works.  Ultimately, regulations play a critical role in protecting the health and safety of the American people.  Ensuring our water is safe to drink, workers are protected from hazards and that consumers are not cheated requires effective and well thought out regulations.  At the same time, we must balance achieving this goal against having overly broad regulations that unfairly and unnecessarily penalize our small businesses.  

How we craft a regulatory system that achieves this goal is certainly an important topic for debate.  When I chaired the committee, we were certainly open to having that discussion.  We all have different perspectives on how to get there, but we all also agree that we want a regulatory structure that works for entrepreneurs and the public. 

The committee passed very similar legislation to the bill we are contemplating today, last Congress.   Since then, there have been a number of critical changes that I do not believe are accurately reflected in the bill before us.  

At the outset, this measure does not take into account recent implementation of the president’s executive order on regulations.  That effort has been recognized in the small business community, among industry groups and in government as having significantly improved how the agencies develop and implement regulations.  Given the important strides that the administration has made in implementing the executive order, there are serious concerns that this bill would, at best, duplicate those efforts.  At worst it could complicate or slow implementation of the order.   

Equally important, this bill has not been adjusted to reflect the realities we face due to sequestration.   The fact is that adding additional bureaucrats to perform yet more work in tinkering with and altering regulations will cost money.  That is money we simply don’t have.  

In this fiscally-constrained era, tough choices need to be made about how to preserve existing programs and ensure the taxpayer gets the best bang for their buck.   With this bill’s $100 million price tag over a five year period, I question the wisdom of spending scarce resources to impede the federal process.  I believe that money could be better spent on restoring funding for the SBA initiatives that have a proven track record of helping small businesses create jobs.

Beyond these two most recent developments -- the president’s executive order and the strains from sequestration – there are concerns about whether the bill would have the intended effect.   Expanding the panel review process from three agencies to the entirety of the federal government raises serious concerns.  

Congress specifically chose the EPA, OSHA and the Consumer Financial Protection Bureau to be covered by panel review because of how directly their rules impact small firms.   However, extending this process to other agencies won’t mean less regulation --- it will mean more complicated regulations.  As these agencies carve out caveats and exceptions with every rule they formulate, the process will only become more confusing for entrepreneurs. Unlike their large corporate counterparts, small firms don’t have legal departments to comb through regulations and analyze every nuance.  

When we previously examined this legislation last year, one member of this committee said their goal wasn’t to reform the regulatory process, but to “grind it to a halt.”  We should be clear – this legislation will not accomplish that goal.  What it will do is make the process more confusing and difficult for small companies to comply.  

I would also note that this year’s bill includes a controversial plan to involve the SBA’s Office of Advocacy in setting size standards that determine whether a company is considered “small”.   The Office of Advocacy is a poor fit for this responsibility and, in fact, tasking them with this work will only serve to duplicate functions already performed elsewhere at SBA.  Given that all agencies have tight resources, it makes little sense to add this responsibility to Advocacy’s portfolio.  These are some of the reasons that the former SBA Chief Counsel for Advocacy under President Reagan testified before this committee against such a move. 

Mr. Chairman, all of us want a regulatory process that works.  While I stand ready to work with the Majority on improving our regulatory structure, this bill may actually do more harm than good.   I hope going forward we can work together in improving the regulatory process on behalf of our nation’s small businesses.   I yield back.

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