Congressman Michael McCaul

Representing the 10th District of Texas

We Need to Stop Regulating Away American Greatness

Feb 21, 2017
McCaul Column

Politicians on both sides of the aisle have spent a lot of time paying lip service to our nation’s entrepreneurs.  On one hand, we tell them they are “the cornerstone of our communities,” then on the other we promulgate regulations that stifle competitiveness and innovation rather than unleash it.  Instead of being able to focus their time on hiring and growing their industries, small business owners are struggling to keep their heads above water.

According to the U.S. Chamber of Commerce, businesses with fewer than 20 employees incur regulatory costs 42% higher than larger business. You will also be interested to know that in 2015, Americans spent 9.78 billion hours complying with federal regulations. Simultaneously, while bearing the brunt impact of these costs, businesses are also seeing their regulatory cost per employee rise. According to the Small Business Administration (SBA), this cost is currently $12,000 per employee, per year. It is no wonder why, in a National Federation of Independent Business' 2016 Problems and Priorities report, Texas small business owners identified two of their top five biggest concerns as “uncertainty over government actions” and “unreasonable government regulations.”  These concerns are not outlandish, and I believe more can be done at the federal level to alleviate the economic burden imposed by unelected bureaucrats on our nation’s businesses.

That is why I introduced the One In, One Out Act as the starting point at the federal level to establish a system of regulating that prioritizes individuals and small businesses, and places innovation and competitiveness at the forefront of the decision making process.  Specifically, this bill would require to identify at least one previously existing regulation of greater or equal cost to repeal before it can promulgate a new regulation.  Originally introduced in Britain in January 2011 as the One-in, One-out rule, and increased to One-in, Two-out in January 2013, and now One-in, Three-out, this policy has reduced annual regulatory costs by almost $2.7 billion.  It was not only successful at lowering costs, but also made the U.K. a more desirable place to start a business. 

While I believe this common sense approach to deregulation will go far in restoring our nation back to a state of responsible regulatory practice, it is critical we acknowledge that overregulation is prevalent at the state level as well.  For example, between 2015 and 2016, state agencies in Texas proposed 10,013 new regulations and adopted 9,184 of those proposed regulations. Of these 9,184 regulations, only 2,933 were finally repealed. This left the small business owners in Texas with 6,251 new rules and regulations they needed to fulfill. 

The economic impact of complying with these new rules includes purchasing new equipment, renovating facilities, and restructuring processes for compliance purposes. When left with no other choice, the costs a small business incurs as a result of regulatory compliance are ultimately passed on to the consumer or addressed internally resulting in reductions in staff, working hours, or benefits.

These unnecessary hurdles have suffocated Texas’ economy for far too long and I applaud State Representative Kevin Roberts for taking the reins on this issue in Texas at the state level.

There is much work to be done and I invite my colleagues in the U.S. House and Senate, our administration, and our bright minds in the private sector to partner with State Rep. Roberts and me to push this concept a step further.  The American people are tired of excuses and false promises. Together we can revitalize small businesses in Texas and across this nation by establishing a system of regulating that spurs economic growth rather than stifling it. Rolling back harmful regulations is essential to making America great again.

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