The Obama Administration claims it can save businesses $10 billion over five years. Businesses and Republicans give the White House review an “incomplete”

By John Tozzi

Since the early 1990s, gas stations have had to equip pumps with nozzles to capture fuel vapors that escape from tanks as drivers fill up. The government mandated the vapor-recovery systems, which can cost station owners more than $100,000 dollars to install and $3,000 annually to run, to keep harmful pollutants out of the atmosphere. However, most new cars and trucks have tanks that also prevent fumes from leaking during refueling. So now federal regulators want to drop the requirement that gas stations maintain the redundant equipment.

The change, expected to be finalized by the Environmental Protection Agency this summer and take effect next year, is one of roughly 500 old rules being reviewed as part of a year-old White House effort to cut red tape. President Barack Obama last January ordered agencies to revamp clunky or unneeded regulations to make it easier for businesses, particularly small ones, to comply. “When we find rules that put an unnecessary burden on businesses, we will fix them,” Obama said in his 2011 State of the Union address.

The White House’s “retrospective review” may begin to loosen some of the tangled bureaucracy that vexes entrepreneurs. Regulation is among the small business owners’ biggest complaints: An October Gallup poll ranked it as their top problem, though other surveys, such as one by theNational Federation of Independent Business, place red tape below concerns such as weak sales.

DISTRACTING REGULATIONS

Small businesses advocates welcome the effort, but they say more needs to be done. “Looking at the list [of rules under review] does point out the difficulty that the regulatory regime creates for small companies,” says Todd McCracken, president of the National Small Business Assn., a Washington trade group. “It’s just the enormous number of relatively small things that a small business owner can’t keep track of.”

Both Republicans and Democrats, eager to be seen as champions of Main Street, pledge to get regulation out of the way of entrepreneurs. Politically, Obama’s focus on streamlining bureaucracy could counter Republican efforts to paint him as a heavy-handed opponent of free enterprise. “Our goal … is to change the regulatory culture of Washington,” Cass Sunstein, head of the White House Office of Information and Regulatory Affairs, said in a November speech. The White House estimates businesses will save $10 billion in the next five years from various rule changes in the works. Among the highlights: The Occupational Safety and Health Administration is cutting redundant reporting requirements; the Department of Health and Human Services says three rules changes will save doctors and hospitals $1 billion a year; and trade-related agencies are trying to make it easier for small businesses to export.

The NSBA’s McCracken says he’d like to see such a shift, along with mechanisms that encourage rule makers to keep regulations sensible. One idea he floats is a “regulatory budget” that tempers new rules based on how much they’re expected to cost affected businesses. “You’re basically giving agencies an incentive to make sure regulations they put forth are as streamlined and logical as possible,” he says.

STILL “A COMBATIVE PROCESS”

Tom Sullivan gives the White House regulatory project a grade of “incomplete.” Sullivan served as chief counsel for advocacy in the Small Business Administration under George W. Bush. He was the federal official charged with making sure regulators consider small businesses. “There’s a giant question mark on whether that process is generating real dollar savings for small business and real reduced paperwork burdens,” says Sullivan, now an attorney at Nelson Mullins in Washington. He also says agencies seem to consider small businesses adversaries, rather than stakeholders, when writing rules. “You can look at [regulation] as a constructive process or a combative process,” he says. “Unfortunately I’ve seen this administration look at it as a combative process.”

The rules for gas stations show how tricky it can be to simplify a regulation. While the EPA change will lift the federal mandate for vapor-recovery systems, states have requirements that need to be changed in turn, says John Eichberger, vice-president of government relations for NACS, a trade group for convenience stores and gas stations. And states in what’s known as the “ozone transport region,” which stretches from Virginia to Maine, won’t be able to remove the costly vapor-recovery systems without replacing them with additional measures to reduce emissions, the EPA says in a prepared statement. Eichberger’s group has asked the EPA to expedite the changes.

Winslow Sargeant, the SBA’s current chief counsel for advocacy, cites a few successes at repealing regulations in the past year, including one that classified milk as an “oil” akin to petroleum and put onerous requirements on companies shipping dairy to avoid spills. “We wrote a letter years ago in terms of why that didn’t make sense, so we’re pleased that that rule is no longer there,” he says. Sargeant also says he wants agencies to give small companies clearer guidance on how to follow the rules. “Small businesses do not want to spend thousands of dollars on working out how to comply and then be told, ‘I’m sorry, that’s nice, but not nice enough,’” he says.

Find the article here:http://www.businessweek.com/small-business/amid-regulations-debate-white-house-seeks-cuts-01242012_page_2.html

Rep. Denny Rehberg voted last year to undermine the Clean Water Act. He claims to have done so to empower states and to save businesses from hidden taxes incurred by their forced compliance with federal regulations.

Unfortunately, the lack of overarching controls would empower only polluters, and Rehberg’s efforts would have the ironic effect of undermining local control. Ordinary people who traditionally use waterways for recreation or who count on the tourist and fishing industries for their livelihoods would have little say. Unlike politicians, Burlington Northern and Marathon Oil cannot be voted out of office.

As for the supposed cost of federal regulations, the oft-quoted figure of a $1.7 trillion hidden tax on businesses cited by Rehberg on his website is misleading at best. It originated in a study funded by the Small Business Administration’s Office of Advocacy with the goal of removing obstacles to profit. According to the less biased Office of Management and Budget, however, the benefits of federal regulation in such areas as public health and greater worker productivity outweigh the costs by $73 to $561 billion.

Considering that an estimated $570.8 billion is already lost to federal revenues through tax subsidies to corporations per year, Rehberg seems to be crying crocodile tears into a river he’d soon find too polluted even for those redoubtable saurians.

Cara Chamberlain

Billings

Read more: http://billingsgazette.com/news/opinion/mailbag/rehberg-s-vote-on-clean-water-act-empowers-polluters/article_453d82d2-1718-5f27-abc6-eb0ae3b359ae.html#ixzz1kOYvzoRD

Each week while Congress is in session the Office of Advocacy will post a highlights schedule of congressional hearings and committee markups that we think will be of interest to stakeholders in the small business community. For further information on the hearings in question please contact the relevant congressional committee.

THIS WEEK

The House and Senate are both in session this week.  They will meet for a joint session for President Obama’s State of the Union address on Tuesday evening.Also Tuesday, conferees from both chambers will meet for the first time to work out differences over a bill to extend the Social Security payroll tax cut.

Majority Leader Reid postponed a vote on a continuous online piracy measure, so the Senate may not have much legislative action this week. On Wednesday, the House takes up a bill to repeal the Community Living Assistance Services and Supports program, a long-term care program created by the 2010 health care overhaul.

HEARING AND MARKUP SCHEDULE

Tuesday, January 24^th

1:30 p.m.          Subcommittee Hearing
TARP, Financial Services and Bailouts of Public and Private Programs Subcommittee of House Oversight and Government Reform Committee will hold a hearing titled “How Will the CFPB [Consumer Financial Protection Bureau] Function Under Richard Cordray?”
Location: 2154 Rayburn Bldg.
Webcast: http://oversight.house.gov/

Wednesday, January 25^th

8:00 a.m.          Subcommittee Hearing
Energy and Power Subcommittee of House Energy and Commerce Committee will hold a hearing titled “American Jobs Now: A Legislative Hearing on HR 3548, the North American Energy Access Act.”
Location: 2123 Rayburn Bldg.
Legislation: HR 3548 — North American Energy Access Act
Webcast: http://energycommerce.house.gov/

Thursday, January 26^th

10:00 a.m.        Full Committee Hearing
Senate Budget Committee will hold a hearing on the outlook for the U.S. and global economy.
Location: 608 Dirksen Bldg.
Witnesses: Alan S. Blinder, professor of economics and public affairs, Princeton University
Joel Prakken, chairman, Macroeconomic Advisors
Ike Brannon, director of economic policy, American Action Forum
Webcast: http://budget.senate.gov/

How to create new jobs, spur innovation – The Hill’s Congress Blog.

On the surface, last month’s economic indicators introduce a dose of positivity into the market: the private sector added 200,000 jobs and the unemployment rate dropped to 8.5 percent, its lowest point since February 2009. But take a closer look and you’ll see that small businesses are still struggling to catch up, as tight access to credit continues to hinder business expansion. The precipitous drop in home prices has made it very difficult for small businesses to use home equity mortgages as a source of business credit, making them more heavily reliant on banks for private capital.

Making matters worse, 60 percent of small business bank loan applications were denied in 2011, leaving small businesses with few options for expansion and job creation. Yet, the outlook for small businesses appears mixed. A National Federation of Independent Business’ November survey reported its best results in years, finding 24 percent of small business owners were planning capital expenditures and only 7 percent planning to hire.  With small businesses normally accounting for 60 percent of new jobs in the economic recovery, improving access to private capital is the key to a sustainable and robust economic recovery.

In exquisite timing, a Senate and House duo of bills would help by allowing credit unions, in aggregate, to increase the amount they can loan by $13 billion. Legislation in the House (H.R. 1418) and in the Senate (S. 509) would increase the percentage of credit union assets that may be loaned to its member businesses. Lending is capped at 12.25 percent, but the proposal would increase it to 27.5 percent, subject to safeguards and monitoring. For a welcome change, these bills are not about taxes, entitlements or government subsidies.  Instead, they are about private sector jobs, small business expansion and benefits to credit union members through competition with banks. Competition, in turn, will encourage banks to ease up on credit, further opening up small business access to capital, which will encourage investment and creating jobs.

The safeguards assure that credit unions have the experience and talent to handle business loans, and at the same time make sure that lending to members is not neglected by pursuit of higher yield business loans. Credit unions have a long track record of lending wisely, and their percentage of loan losses is regularly lower than banks’ track record.  Done right, a portfolio that’s one-quarter business loans can benefit the credit union members, the small businesses who borrow, and the public who will see an additional 140,000 new jobs as a result of this business credit improvement.

Since credit union “profits” go back to members in the form of lower cost services and loans, members should  especially welcome the improvement.Providing increased access to private capital would provide a much needed spark to businesses that are very small, innovative and more diverse.  According to the Small Business Administration Office of Advocacy, over half of small businesses are home-based; they generate nearly 17 times more patents per employee than large businesses; and they include 8 million women-owned, 6 million minority-owned, and 2.4 million veteran-owned firms.  Having access to private capital is necessary to spurring investment and innovation, stimulating economic output and creating jobs – all without increasing federal debt.

For consumers, the bigger picture is that improving small business access to capital, as the legislation proposes, would create a significant number of private sector jobs, require no government funding, and foster more competition between banks and credit unions.

Indeed, Congress can get it right when it tries.

By: Chad Brooks, BusinessNewsDaily Contributor

A new report fromCreditDonkey.comshows it takes less than $5,000 for most home-based business owners to get up and running.

The research, which details where small-business owners got their startup capital, found that while the average cost of starting a home-based business was $25,000, 39 percent of owners said it took less than $5,000, with another 25 percent not needing any startup financing at all.

According to the report, small-business owners needing money turned to a number of sources, such as:

• Personal/family savings – 60 percent
• Credit cards – 10 percent
• Business loans from a bank – 7 percent
• Home equity loan – 4 percent

In order to get up and running, CreditDonkey says there are several expenses entrepreneurs can expect to pay, including legal fees and licenses, marketing, supplies and equipment, insurance and professional and merchant services.

While it might not take much money to get started, the report shows most home-based businesses don’t generate much money, either, with 57 percent bringing in less than $25,000 a year.

For those looking to take the plunge, experts at CreditDonkey.com offer several tips for aspiring home business owners:

• Bill and receive payments as quickly as possible, and follow up on overdue accounts in order to keep the cash flow moving.
• Have customers pay by credit card to help reduce the chances of default.
• Don’t use a business credit cardto finance large startup expenses. Instead, use them for smaller purchases, such as supplies and equipment.
• Make sure enough money is being set aside for all tax obligations.

CreditDonkey is a credit card comparison website that based its research on statistics and information from the U.S. Small Business Administration, the Office of Advocacy of the U.S. Small Business Administration and the U.S. Census Bureau.

In a possible sign of economic recovery, small-business lending hit a four-year high in November, a new report shows. At the same time, the number of small-business loans in delinquency declined.

The results are revealed in the Thomson Reuters/PayNet Small Business Lending Index that tracks the overall volume of small-business financing, Reuters reports.

The lending index jumped by 18% between November 2010 and November 2011. It’s now at its highest level since February 2008.

The surge shows “a new phase of the business cycle,” PayNet’s founder told Reuters. “Businesses are betting on the future with increased investment spending.”

The demand for small-business loans is rising as sales increase and businesses become more creditworthy, one small-business lending broker told The Wall Street Journal. That’s positive news, since more than 60% of small-business loan applications were denied in 2011, the Journal reports.

But obstacles remain. Some banks are now imposing higher interest rates on small-business owners who pay off their balances in monthly installments instead of all at once, the Journalreports.

Still, the Thomson Reuters/PayNet survey shows more small business owners are taking charge of their debts. The number of loans in “moderate delinquency” (behind by 30 days or more) and “severe delinquency” (behind by 90 days or more) both declined in November to 1.5% and 0.39%, respectively, Reuters reports.

The Small Business Lending Index mirrors other economic indicators that seem to suggest a recovery, Reuters reports. For example, the annual pace of economic growth in the fourth quarter of 2011 is expected to top 3% — up from 1.8% in the third quarter.

Plain language in federal regulation comes closer

• By Camille Tuutti
• Jan 06, 2012

Federal regulations can be a maze to navigate, but the federal government this week took further steps to streamlining jargon in an effort to make rules more accessible to citizens.

Writing on the OMBlog, Cass Sunstein, administrator of the Office of Information and Regulatory Affairs, discussed the progress the government has made in breaking down complex and lofty language, thus making regulations more comprehensible. The concern, Sunstein said, is bipartisan and comes from businesses, public interest groups and “countless individual citizens.”

After President Barack Obama took office in 2010, he directed rules to be written in plain language to make them easy to understand. He also said regulations “shall be adopted through a process that involves public participation,” including an “open exchange of information and perspectives,” Sunstein writes.

After the passage of the Plain Writing Act of 2010, agencies began concentrated efforts to paring down rhetoric. Today, many agencies have a website dedicated to plain language and have tasked specific officials with overseeing plain writing efforts.

Building on that effort to strip regulation language, the Office of Information and Regulatory Affairs on Jan 4 directed agencies to provide the public with straightforward executive summaries of all rules. With separate descriptions of all key provisions and policy choices, these summaries will detail the need for the rule and explain its legal basis.

“The use of clear, simple executive summaries will make it far easier for members of the public to understand and to scrutinize proposed rules – and thus help to improve them,” Sunstein wrote. “And for final rules, such summaries will make it far easier for people to understand what they are being asked to do.”

The U.S. Senate ties up loose ends.

One of the things I couldn’t tell you about when it happened has to do with my friend, Dr. Winslow Sargeant (who is not Kellen Winslow and has never played for the San Diego Chargers), Chief Counsel of the SBA Office of Advocacy.

The sad saga of Dr. Sargeant’s nomination to the Chief Counsel spot and the small minded Senate politics with which that nomination was greeted, theresulting standoff and delay, and President Obama’s final decision to resort to a recess appointment in order to get him installed have been pretty thoroughly hashed out in previous posts here at The Journal Blog and at the Microbusiness News Briefs.

I thought the story was over … until I received a certain press communication from the SBA in November.

The release essentially said that the Senate had finally confirmed Dr. Sargeant’s nomination to Chief Counsel of the SBA Office of Advocacy. After sitting in the Chief Counsel chair for sixteen months, doing the job and doing it well, the Senate finally decided to make it official.

Better late than never, I suppose.

From a practical point of view, none of this matters, of course. The nation’s small and microbusinesses have been benefiting from Dr. Sargeant’s championship for all this time anyway, such that we all managed to successfully forget that he hadn’t been confirmed by the Senate yet. I don’t know that this official blessing of what he’s been doing all along will make all that much of a difference on a day-to-day basis.

We won’t tell those Senators about that, though. It might make the cry.

It is my earnest hope to be able to persuade Dr. Sargeant to join me for a Microbusiness Conversation sometime this month. We probably won’t talk much about the Senate (I don’t want to get him in trouble), but we probably will be talking about what he’s been doing all this time without Senate approval. I hope you’ll be able to listen in.

Meanwhile, if there is anything to be learned from this entire tale, is is this: if you’re going to pay attention to what goes on in Washington, first develop a sense of humor.

Otherwise, you’ll end up with an ulcer.

The U.S. Equal Employment Opportunity Commission (EEOC) has launched an internal task force that will focus on expanding and improving outreach and technical assistance to small businesses. The Small Business Task Force, led by Commissioner Constance S. Barker, will work to find ways in which the agency could better collaborate with the small business community to ensure compliance with federal anti-discrimination laws.  The laws enforced by the EEOC apply to employers who meet the threshold number of employees for coverage. (EEOC’s website spells out who the laws apply to.)

The Small Business Task Force plans to focus on newly established small businesses and those that are too small to afford lawyers or human resource personnel.  The task force will work during 2012 to develop recommendations to the commission, which will be presented in a public commission meeting.

The task force will, among other things, develop recommendations on how to:

• Utilize new technology to expand outreach to small businesses;
• Develop technical assistance and training initiatives for small businesses;
• Identify specialized approaches to aid small businesses owned by women and minorities;
• Identify specialized approaches for micro businesses, generally those with 50 or fewer employees; and
• Enhance small business information and training on the EEOC’s web site.

The commission invites members of the public to submit written input on the task force. Public comments may be e-mailed to smallbusiness@eeoc.gov.