News From Congresswoman
Nydia M. Velázquez
Representing New York's 12th Congressional District - Brooklyn, Manhattan, Queens
Ranking Democratic Member, House Small Business Committee

For Immediate Release
May 19, 2004

CONTACT: Wendy Belzer, Kate Davis, (202) 225-2361

Bush's Plan Fails as Federal Regulations Continue to Burden U.S. Manufacturers
Velázquez highlights the regulatory challenges still facing small businesses

WASHINGTON - Congresswoman Nydia M. Velázquez (D-N.Y.), Ranking Member of the House Small Business Committee, today examined the possible impact that federal regulations have on America's small businesses, particularly those within the manufacturing sector, and how the Bush administration's initiative to reduce the regulatory burden on this sector may be failing.

"Small businesses, our main job creator, face a significant number of challenges today - many more than those of their corporate counterparts," Congresswoman Velázquez said. "And one of the biggest barriers they have to overcome is federal regulations. These regulations are placing a heavy burden on our nation's small firms, particularly those in the manufacturing sector. 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 the federal paperwork burden in a single year."

At today's hearing, Dr. John Graham, administrator for the White House's Office of Information and Regulatory Affairs (OIRA), testified on President Bush's new initiative to identify the regulatory burdens and paperwork requirements that are being placed on small manufacturers. OIRA is the agency in charge of reviewing regulations and providing feedback on how agency regulations will comply with current law. It is part of the agency's responsibility to ensure that the paperwork burden does not weigh too heavily on small businesses and manufacturers. Since the regulatory burden is growing for manufacturers, it is necessary to examine if President Bush's plan is actually having any positive effect.

The U.S. manufacturing sector has lost over 2.7 million jobs in the last three years, and its unemployment rate remains at a 53-year low. Federal regulations have been placing a burden on small businesses in general - 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. At the root of the problem is the failure of agencies to comply with current law, and the sudden explosion of paperwork that has fallen squarely on the shoulders of small businesses.

"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 that are impacting small businesses," Congresswoman Velázquez said. "There is no reason that these vital businesses should be carrying the disproportionate weight of the regulatory burden - wasting valuable time and money on paperwork requirements. The strength and recovery of the U.S. economy depends on the vitality of our country's small businesses and small manufacturers, and we must work to ensure they are not drowning in regulations."

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