WASHINGTON — According to a report issued by the Office of Advocacy of the U.S. Small Business Administration (SBA), President Bush’s Executive Order 13272, requiring federal agencies to consider the impact of their regulations on small businesses before issuing a final rule, is still not receiving full compliance.

The SBA’s Office of Advocacy report states that “more compliance is needed before we claim complete success in getting agencies to consider small entity impacts more fully.”

Research looking into the federal regulatory burden falling on small business concluded that, considering all federal regulations and all business sectors, federal regulations cost firms with fewer than 20 employees nearly $7,000 per employee per year. Regulations cost medium-sized firms about $4,300 and large firms approximately $4,500. Costs per employee thus appear to be 55 to 60 percent higher for small firms than medium-sized and large firms.

On March 19, 2002, the president announced his Small Business Agenda, which included the goal of “tearing down the regulatory barriers to job creation for small businesses and giv[ing] small business owners a voice in the complex and confusing federal regulatory process.” On August 13, 2002, the president signed Executive Order 13272, titled “Proper Consideration of Small Entities in Agency Rulemaking.”

The report on progress over the past year indicates that federal agency compliance has been inconsistent and many of the original concerns regarding the disproportionate impact of federal regulations on small business continue to exist today.

Publication date: 09/08/2003