Federal agencies created 29,014 new federal regulations, averaging 70 a week over the past eight years. These regulations range from importation of kiwis from Chile, cost of living adjustments of royalty rates pay for published musical works, reporting and recordkeeping requirements, to health insurance and environmental protection. The Office of Information and Regulatory Affairs (OIRA), an agency within the Executive Office of the President, determined approximately 10% of these regulations adversely affect the economy by at least $100 million a year (i.e., economically significant rules).
The Regulatory Flexibility Act requires federal agencies to determine if a rule would have a significant effect on a substantial number of small businesses. During the past eight years, federal agencies created 5,340 rules that affected small businesses, 841 of those were economically significant. In other words, small businesses have to use their limited resources to navigate 13 new federal rules every week. Centers for Medicare & Medicaid Services, Food and Drug Administration, and Environmental Protection Agency were among the most active agencies and the most common topics included reporting and recordkeeping requirements, administrative practices and procedures, and government procurement.
Regulations are necessary to the society. Businesses have to comply with law and regulations to produce safe and sound products and services for their customers. But excessive regulations and red tape have shown to have severe adverse effects on consumers, competitiveness, and economic growth. Small businesses, the backbone of the U.S. economy, should not be using their scarce resources on dealing with red tape but rather to maintain, improve, and innovate products and services to compete at home and abroad. Deregulation and cutting red tape should be top policy priorities for federal as well as local governments to boost economic growth.