Obama Signs Another Reg Reform Executive Order

July 19, 2011

In the wake of his January Memoranda and Executive Order 13563, which required executive branch agencies to reduce regulations that placed unnecessary burdens on U.S. businesses and the public, President Barack Obama signed July 11 a new Memoranda and Executive Order aimed at independent agencies.

According to the Obama Administration, no executive order in American history specifically has called on independent agencies to reduce their regulatory burden. Independent agencies are those that constitutionally are part of the executive branch but are independent of presidential control. Examples include: the Federal Election Commission (FEC), Federal Communications Commission (FCC), and Federal Trade Commission (FTC).

While the independent agencies technically are not required to comply with the Executive Order, as under long-standing precedent, they are not subject to executive order requirements, the expectation within the administration is that they will comply on this occasion, given the unprecedented nature of the request and the recent success of executive branch agencies in conducting retrospective reviews.

The January Memoranda was directly addressed at improving the reducing the regulatory burden on small firms. The Memo stated that the Obama Administration was “firmly committed to eliminating excessive and unjustified burdens on small businesses, and to ensuring that regulations are designed with careful consideration of their effects, including their cumulative effects, on small businesses.” It goes on to emphasize that “it is especially important for agencies to design regulations in a cost-effective manner consistent with the goals of promoting economic growth, innovation, competitiveness, and job creation” in the current economic environment.

Specifically, the Memo directed executive department and agencies to give serious consideration to whether and how it can provide small businesses with increased flexibility, as provided by the Regulatory Flexibility Act (RFA).

Cass Sunstein, administrator of the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB), asked the agencies to voluntarily comply with the regulatory review request in February OMB memo but only one agency, the, the National Labor Relations Board, submitted a plan to review its regulations.

Sunstein made it clear that he expects the independent agencies to comply, saying, “[W]hen the president of the United States says directly and clearly, independent agencies should develop look-back plans in 120 days and should follow the general principles laid out on Jan. 18, that’s a very significant development.”

NSBA Reaction

The National Small Business Association (NSBA) continues to welcome the administration’s efforts to enact meaningful regulatory reform. Perplexing paperwork and an oppressive federal regulatory regime long have burdened innumerable small-business owners across the country.

U.S. Small Business Administration (SBA) research demonstrates that, in total, companies with fewer than 20 employees pay more than $10,585 per employee to comply with federal regulations each year. Large firms pay about $7,755—or 36 percent less per employee.

Please click here for more information on NSBA’s position on regulatory reform.

NSBA looks forward to working with Congress and the Obama Administration to achieve meaningful regulatory relief for America’s small businesses.

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