Tag: SBA

Circumnetting the National Association of Manufacturers

  • In Iowa, Gov. Terry Branstad will moderate a forum on manufacturing for Republican presidential can

    Gov. Terry Branstad

    didates in Pella on Nov. 1. The National Association of Manufacturers and Vermeer Corp. are sponsoring the forum, which will be held at Vermeer’s headquarters. (NAM news release.)
    Mary Andringa is president of Vermeer and chairman of the board of the National Association of Manufacturers. From IowaPolitics.com:

“Manufacturing is vital to the American economy, and we expect issues that affect manufacturers – from tax reform to energy security to job growth – to play a central role in the presidential election,” Andringa said. “We look forward to welcoming the candidates to Vermeer and learning about their visions for keeping manufacturing in America strong.”

  • There’s more to the McClatchy Newspapers’ article than the shocking headline would let on, “No easy solutions for U.S. deficit.” (Next: “Economy poses problems.”) The story analyzes the tax elements of the deficit-reduction debate, i.e., when is a loophole really a special-interest tax break versus sound economic policy. And how is that both House Budget Committee Chairman Paul Ryan and President Obama can both support a top corporate tax rate of 25 percent?

“‘It’s easy for business in general to rally around a 25 percent rate, or a lower rate, but when you get to (tax) base broadening, that’s where it’s going to be very tricky,’ said Dorothy Coleman, vice president of tax policy for the influential National Association of Manufacturers.”

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Good Calls from OSHA on Rules Affecting Manufacturers, But …

Kevin Bogardus at The Hill reports on the reaction to the recent decisions by the Occupational Safety and Health Administration to withdraw its proposed re-interpretation of occupational noise standards and the rule to require a column report possible muskuloskeletal injuries (and camel’s noise back into the tent of ergonomic rules). From “Labor unions uneasy as OSHA withdraws proposed rules“:

“We hope that these first two steps are a signal to the business community and employers in general that OSHA will ‘stop, look and listen,’” said Joe Trauger, vice president of human resources policy for the National Association of Manufacturers.

But Trauger said the actions by OSHA are not enough since other proposed rules are still being readied that could burden business. He pointed to a regulation being developed by the agency that would have employers find and fix their own workplace hazards under what will be called an injury and illness prevention plan.

Trauger said he hoped OSHA would work with business groups to mitigate their concerns. He said the administration may be taking a different tack on regulations to help create more jobs.

“Perhaps the administration has looked at the first two years and realized that the job growth is not as robust as they hoped and that a different approach is warranted,” Trauger said.

See also Washington Post, “Regulators, industry at odds on repetitive-motion injuries.”

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Small Business Bears a Heavier Burden of Federal Regulation

The Small Business Administration’s Office of Advocacy has just released a new study, “The Impact of Regulatory Costs on Small Firms,”  again confirming what employers already know: The marginal costs of federal regulation fall more heavily on small business.

The main point:

The annual cost of federal regulations in the United States increased to more than $1.75 trillion in 2008. Had every U.S. household paid an equal share of the federal regulatory burden, each would have owed $15,586 in 2008. By comparison, the federal regulatory burden exceeds by 50 percent private spending on health care, which equaled $10,500 per household in 2008. While all citizens and businesses pay some portion of these costs, the distribution of the burden of regulations is quite uneven. The portion of regulatory costs that falls initially on businesses was $8,086 per employee in 2008. Small businesses, defined as firms employing fewer than 20 employees, bear the largest burden of federal regulations. As of 2008, small businesses face an annual regulatory cost of $10,585 per employee, which is 36 percent higher than the regulatory cost facing large firms (defined as firms with 500 or more employees).

In bullet form, the key findings:

  • The annual cost of U.S. federal regulations in 2008: $1.75 trillion
  • Regulatory costs on small business per employee in 2008: $10,585
  • Regulatory costs on large business per employee in 2008: $7,755
  • Percentage of U.S. national income expended on federal regulations: 21 percent
  • Federal regulations plus tax receipts as percentage of national income: 35 percent

This is the SBA Office of Advocacy’s fourth edition of the study, and it reflects the burdens after eight years of the Bush Administration, under which federal regulations soared. (See James Gattuso, Heritage Foundation, “Red Tape Rising: Regulatory Trends in the Bush Years,” published in March 2008.) The Obama Administration has only stepped up the pace of federal regulations, with the most obvious examples being the expanded economic control imposed by the Imperial EPA.

Rep. Sam Graves (R-MO), ranking member of the House Small Business Committee, noted other examples of burdensome pending regulations in his news release reacting to the SBA report, ”Graves: New SBA Report Confirms Government Regulations Unfairly Burden Small Firms“:

This report clearly illustrates the heavy burden that federal mandates place on small businesses.  As I have said before, piling unfair costs on the entrepreneurs who have lead our economy in the past is counterproductive and will only serve to drown job creation.  Adding insult to injury, this data does not take into account the new wave of regulations that are about to hit entrepreneurs, such as the 1099 reporting rule and other health care mandates, regulations in the financial reform law, and potential new EPA rules.

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Recess Appointments, Regulations and Small Business

President Obama announced his intent to make four recess appointments to “key Administration posts” today:

  • Maria del Carmen Aponte, Nominee for Chief of Mission, Republic of El Salvador
  • Richard Sorian, Nominee for Assistant Secretary for Public Affairs, Department of Health and Human Services
  • Elisabeth Hagen, Nominee for Under Secretary for Food Safety, Department of Agriculture
  • Winslow Sargeant, Nominee for Chief Counsel of Advocacy, Small Business Administration

Major business and manufacturing trade associations that represent small businesses, including the National Association of Manufacturers, recently joined in a letter to the President raising objections to Sargeant’s appointment to the important position representing small business on regulatory issues within the Administration. Those responsibilities are many, and they presuppose an experienced attorney with regulatory experience. Excerpt:

The Office of Advocacy advances the interests of small businesses by also ensuring that the requirements set forth by the Regulatory Flexibility Act of 1980,3 as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 19964 are met. The Office of Advocacy reviews the Regulatory Flexibility analysis or certification prepared by federal departments and agencies, submits comments on proposed rules, hosts public roundtables to solicit comments from small business entities, presents Congressional testimony, engages in Interagency dialogue, files amicus curiae, periodically reviews existing regulations, and participates as a panel member on SBREFA panels when convened by the respective federal agency.

The Office of Advocacy’s SBREFA responsibilities have been significantly expanded under the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-517) to include the newly created Consumer Financial Protection Bureau (CFPB). The Small Business Fairness and Regulatory Transparency provisions included in P.L. 111-517 requires the CFPB to include recommendations from a Small Business Advocacy Review Panel with any proposed rules that are anticipated to have significant impact on small firms and to inform the public of how its rules will impact small business access to credit.

The letter also cites arguments by Sen. Olmpia Snowe (R-ME) and other members of the Senate Small Business Committee who had written Sargeant’s qualifications were better fitted to serving as the SBA’s Deputy Administrator. (Earlier, Snowe news release, September 2009.)

In his statement announcing the recess appointments, the President chided Senators who had prevented the confirmation and urged them “to stop playing politics with our highly qualified nominees.” One president’s “playing politics” is a Senator’s legitimate criticism, though.

Despite the business community’s objections to Sargeant’s appointment to the advocacy position, there’s no doubt he knows business. We wish him well on his new multitude of responsibilities, and look forward to working with him.

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How a Sign Company Views the Economy, Federal Support

The most notable thing about President Obama’s visit to a Washington, D.C., sign manufacturer Friday was not the President’s comments, or his traveling the short distance via helicopter, but the remarks from Guy Brami, principal of Gelberg Signs, about the company’s investment plans and its role in the community.

From the news release, “President Barack Obama Visits Washington, DC Based Gelberg Signs“:

“We see Gelberg Signs as a threshold company,” said Guy Brami, principal of Gelberg Signs, along with his brothers Luc and Neil. “We are not using the SBA loans or the federal tax incentives to just get by, but rather using them as a springboard to fuel our future growth. What we seek at this point is additional capital to take advantage of our excess capacity and potential revenue.”
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Promoting Exports, the Manufacturers’ Perspective

Our Dispatch from the Front report on Monday noted U.S. Trade Representative’s conference Thursday, “Jobs on Main Street, Customers Around the World: A Positive Trade Agenda for US Small- and Medium-Sized Enterprises,” but the event has so much good content for the manufacturing sector that it’s worth a separate plug.

Three board members from the National Association of Manufacturers are participating:

Chuck Wetherington of Hanover, MD, the President of BTE Technologies, is on a morning panel, “SME Export Successes and Major Policy Barriers.” The company manufactures  physical therapy, occupational therapy, and athletic training equipment.

Roy Paulson of Paulson Manufacturing, a manufacturer of protective equipment, and Drew Greenblatt of Marlin Steel Wire, which makes custom-engineered steel wire products, join an afternoon panel, “Key Issues in Export Promotion.”

Ambassador Ron Kirk and the rest of U.S. Trade Representative’s Office, as well as the Small Business Administration and the Department of Commerce have all put great energy into export promotion programs, and the conference for small and medium enterprises reaches out to companies that can do much more in the way of selling their products abroad.

At the same time, government promotion and financing packages will be hobbled if U.S. exporters face tariffs and other trade barriers our global competitors do not. Canada, the European Union and Asian countries are all moving forward with trade agreements that make their exports more affordable than U.S. products. 

If the goal is a “positive trade agenda,” then the Administration should also be pushing for Congressional enactment of pending U.S. trade agreements with Colombia, Panama and South Korea.

 

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Edicts from the Imperial EPA: Yes, They Will Hurt Small Business

Released as it was on December 23, this letter from the Office of Advocacy of the U.S. Small Business Administration to the Environmental Protection Agency received too little attention. The letter, submitted as a comment on the EPA’s proposed rule to regulate the emissions of greenhouse gases from industry sources (the tailoring rule), provides a clear example of where the EPA is cutting corners in its drive to reshape the U.S. economy.

Excerpt from the letter:

EPA has certified that the GHG Tailoring Rule, along with two interrelated rules that will result in the federal regulation of greenhouse gases for the first time, will not have a significant economic impact upon a substantial number of small entities.  We disagree.

As discussed below, whether viewed separately or together, it is clear that EPA’s Clean Air Act greenhouse gas rules will significantly affect a large number of small entities.  EPA was therefore obligated under the Regulatory Flexibility Act to convene a Small Business Advocacy Review Panel (or Panels) prior to proposing these rules.  By failing to do so, EPA also lost its best opportunity to learn how its new greenhouse gas rules would actually affect small businesses, small communities and small non-profit associations.  These small entities are concerned that EPA has not adequately considered regulatory alternatives that could achieve greenhouse gas emission reductions without imposing heavy new compliance burdens on large numbers of small entities.

The letter sites examples of affected entities:

  • More than 100 small brick manufacturers;
  • 400-500 small foundries;
  • 150 small pulp and paper mills;
  • Over 100 small coal mines;
  • 80 small lime manufacturers;
  • 350 small municipal utilities;
  • More than 40 small electric cooperatives; and
  • At least 16 small petroleum refineries.
  • The economic impact aside, the most important message in the letter from this official advocacy panel is that the EPA is ignoring the law, the Regulatory Flexibility Act, that requires an assessment of the impact of such a rule on small business. That’s the kind of thing we’re referring to when we call the agency the Imperial EPA.

    This letter a great topic for hearings by the House and Senate Small Business Committees.

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