STATEMENT
of the
Honorable Nydia M. Velázquez, Ranking Democratic
Member
House Committee on Small Business
Hearing on "Red Tape Reduction: Improving the Competitiveness
of
America's Small Manufacturers"
May 19, 2004
Thank you, Mr. Chairman.
Small businesses, our main job creator, face
a significant number of challenges today - many more than
those of their corporate counterparts. And one of the biggest
barriers they have to overcome is federal regulations -
these are placing a heavy burden on our nation's small enterprises,
particularly those in the manufacturing sector.
A recent study reported that for firms employing
fewer than 20 employees, the annual regulatory burden is
nearly $6,975 per employee - almost 60 percent higher than
that of firms with more than 500 employees. This is not
right - and something needs to be done to change it.
Although the Bush administration has acknowledged
this unfairness, and promised to help, nothing has been
done. While Republicans claim that reducing the regulatory
burden is a priority, the Bush administration holds the
record for the largest increase in federal paperwork in
a single year.
This committee is very aware of these regulatory
burdens. We have held several hearings, and I was fortunate
to be able to sit in on Congressman Sherock's subcommittee
hearings on this very issue. In those hearings we learned
that small businesses do not have the proper points of contacts
these agencies. And, in addition, a number of federal agencies
are not complying with current laws, which intend to reduce
the regulatory burden that often times plague small firms.
Through the convergence of the failure to comply with current
law and the sudden explosion of paperwork, the Bush administration
has managed to make the situation worse for small firms.
This has created a perfect storm for our nation's small
businesses, leaving them submerged in paperwork, and unable
to get any assistance from the federal government.
Today we will look at the effect the paperwork
burden is having on our economy, particularly within the
manufacturing sector. This sector cannot afford to be overwhelmed
and burdened by paperwork and regulations. Employment within
the manufacturing sector remains at a 53-year low, with
2.7 million manufacturing jobs lost over the past three
years.
It is unclear at this point just how much of an impact these
increasing paperwork requirements are having on our nation's
small manufacturers. But clearly, given the tenuous state
of this sector, even minor impacts can resonate throughout
the whole industry.
Under the direction of President Bush, Dr.
John Graham has undertaken an effort to identify those regulations
that create the most barriers for manufacturers, and a process
for evaluating and developing less burdensome rules. To
explore this issue more, we will be hearing from Dr. Graham,
the administrator for the Office of Information and Regulatory
Affairs (OIRA).
This office is in charge of reviewing regulations,
and then providing relevant feedback on how these regulations
will comply with current law.
OIRA's primary responsibility is to reduce
the paperwork burden on small businesses that has resulted
from the federal government. Through this examination and
discussion, it is my hope that we can find a balanced solution
to reduce the regulatory burden on our country's small manufacturers.
There has been an overwhelming spiral of paperwork
that has been thrown onto our small enterprises, and I hope
we will specifically improve those regulations which impact
small businesses.
There is no reason that these vital businesses
should be carrying the disproportionate weight of these
regulatory burdens - wasting valuable time and money on
paperwork requirements. The strength and recovery of our
economy depends on the vitality of our nation's small businesses
and small manufacturers, and we must work to ensure that
they are not drowning in these regulations.
I look forward to hearing the testimony of
the witnesses today.
