Like the weather, everyone complains about the red tape Washington puts on American small businesses, but no one does anything about it. Well, almost nobody. The Small Business Administration last year launched a project to review and reform regulations that hurt small business. Called the “3R” initiative – for “regulatory review and reform,” the agency this morning released a report outlining its findings so far. The highlight of the report is a “top ten” list of regulations in need of reform, garnered from nominations from the public and small businesses themselves. Topping the list are costly “new source performance standards” imposed by the EPA that require the nation’s 28,000 dry cleaners to conduct extensive tests for emissions from their equipment. The tests, according to the SBA, are not only costly, but – because of advances in technology – outdated.
Other regulations in the “top ten” include costly rules imposed on rural water systems; overly restrictive rules that increase the cost of recycling, unnecessary flight restrictions on airports in the Washington, D.C. area; simplifying the rules for deducting the costs of home offices from income tax; and more. The list may not be attention-grabbing, there are certainly few “horror story” rules that will make politicians stump speeches. But the reforms nonetheless would make a real difference to thousands of small businesses.
Now comes the hard part of actually getting the changes made. Conventional wisdom to the contrary, steps to reduce regulatory burdens have been rare during the Bush Administration. According to a soon-to-be-released Heritage study, total cost savings in 2007 from regulatory reforms were only about 1/17th the cost of new burdens imposed. The SBA effort could improve that ratio. Small businesses — as well as the rest of us — should wish them luck.