BIG FINAL PUSH FOR REGULATIONS
Monday, June 6, 2016
WIPP Works in Washington
BIG FINAL PUSH FOR REGULATIONS
By: Ann Sullivan, WIPP’s Chief Advocate
The Obama Administration may be winding down, but the White House team does not have its feet up, polishing off their resumes. To the contrary, regulations that have been pending in agencies are being finalized at a fast clip.
According to the American Action Forum, since January the Administration has pushed out 195 regulations. The Heritage Foundation says 27 major regulations (referred to in government speak as rules) were promulgated last year. There are nuances to the 195 number— after all, many are not imposing new burdens. But suffice it to say, this Administration figured out that what isn’t possible through legislation can be possible through regulations.
While the Constitution makes it clear that Congress makes the laws, and the Executive branch implements them—it’s not so simple. In 1996, Congress created a tool to overturn agency regulations they disapprove of, within 60 Congressional meeting days of it being finalized. Usually, that doesn’t amount to anything because a President would just veto a Congressional disapproval of a regulation. However, in an election year, there are so few days Congress comes to work in Washington, that regulations finalized in the Spring and Summer do not have 60 Congressional work days for review and are subject to an additional review period in the new year- with a new President and Congress.
What does this have to do with women business owners? Plenty. Here are a few examples.
The Administration’s Overtime rule came in just under the wire on May 22. The rule more than doubles the salary threshold at which employers are legally required to pay employees for overtime. It applies to salaried employees in executive, administrative and professional roles that are making up to $47,476 annually. If those employees work more than 40 hours in a week, they will now be eligible for time-and-a-half payments. The current threshold, set in 2004, is $23,660. The rule ‘s new salary threshold will take effect December 1st.
Not all regulation changes are harmful to small businesses, such as the recent rule on subcontracting issued earlier this week by the SBA. The new rule simplifies the calculation of how much of a small business set-aside can be subcontracted. The rule also encourages greater subcontracting with “similarly situated entities.” So a WOSB set-aside contract can be subcontracted to another WOSB firm, and that subcontract is excluded from limitations on subcontracting. A WOSB subcontracting with a WOSB firm is a win-win. WOSBs help the government meet the intent of the set-aside and WOSBs get to help other WOSBs grow.
The rule also helps WOSBs by expanding the review role for Procurement Center Representatives (PCRs), excluding certain purchases from the Non-manufacturer rule, and making it easier for small businesses to compete for contracts through Joint Venture Agreements.
Another example of trending in the right direction at SBA is the effort to overhaul the complex certification and long approval times in the 8(a) program. The paperwork and application processing times were so burdensome that firms waited more than 6 months for SBA to confirm it received an application. Now, approval of 8(a) applications are as little as 48 hours and annual recertification is down to one page. SBA should do this with all of its certifications—the HUBZone certification comes to mind.
Despite the few good examples above, many regulatory requirements are tough on small businesses and no one ever made money doing paperwork. While compliance with the law is necessary, layers of unnecessary paperwork often accompany government reporting requirements. WIPP joined the new Rethink Red Tape coalition. Focused on increasing awareness of the damaging impact of regulatory burdens on the economy, WIPP will be highlighting women business owners that are struggling with unnecessary paperwork, complex commerce requirements, and outdated mandates from government agencies.
WIPP supported legislation recently passed by the Senate Small Business Committee, and offered by Senator Joni Ernst to strengthen the hand of a little known but important agency – the SBA Office of Advocacy. Designed to be the regulations watchdog on behalf of small businesses, this small office does mighty work. The Ernst legislation makes this office more powerful by empowering the agency to require the Administration to review any rule’s impact on small businesses.
While many in Congress agree that the regulatory structure needs an overhaul, changes to the process may be relatively far away. So, bit by bit we intend to chip away at federal requirements that eat away at businesses. Is a Federal regulation driving you crazy? Our team in Washington would love to hear you. Let’s work together to stem the tide of red tape.