New Report: Uncertainty Hampering Small Businesses; GOP Taking Action with Plan for Jobs
“If the Obama Administration wants to get small business owners to expand, it needs to stop arguing that policy uncertainty doesn’t matter,” advises Scott Shane, Professor of Entrepreneurial Studies at Case Western Reserve University and co-author of a new report on the impact uncertainty is having on small business growth and job creation. The report, released by the Federal Reserve Bank of Cleveland yesterday, finds that “the net percentage of small business owners planning to hire would be six percentage points higher” if not for the job-crushing uncertainty coming out of Democrat-run Washington. Here’s more from the report:
“While the downturn and weak recovery certainly had a large negative effect on small business hiring plans, policy uncertainty has exacerbated this effect. In the summer of 2011, the net percentage of small business owners planning to hire would be 6 percentage points higher if it were not for policy uncertainty. That is, either 6 percent more small business owners would be planning to hire (or 6 percent more small business owners would not be planning to lay off workers), were policy uncertainty not currently an issue. …
“In our view, policymakers should take seriously the widespread anecdotal reports that policy uncertainty is adversely affecting small business owners’ expansion plans.”
Unfortunately, the Obama Administration isn’t taking small business owners’ concerns seriously. Last month, the Treasury Department launched “a full-fledged effort to knock back Republican claims that overregulation is slowing down economic growth” (Politico, 10/24/11), arguing in a Treasury Department blog post that one of the “most commonly repeated misconceptions” is that “uncertainty created by proposed regulations is holding back business investment and hiring.” Yesterday’s report confirms what small business owners have already made clear: “complying with government regulations is the most important problem facing them today.”House Republicans have been focused on removing the shackles of uncertainty that are hampering small business job creation with the Plan for America’s Job Creators, and will continue moving that effort forward with action on two bills this week that will help address the burden of excessive regulations on job creators. The Regulatory Accountability Act (H.R. 3010) will require agencies “to assess the costs and benefits” of new regulations on small businesses and “in most cases, to adopt the least-costly alternative to achieve the regulatory objectives of Congress,” according to the House Judiciary Committee. The Regulatory Flexibility Improvements Act (H.R. 527) closes loopholes used by federal agencies that allow them to impose costly, job-crushing regulations, says Small Business Committee Chairman Sam Graves (R-MO). Follow the progress of these, and more than 20 other bipartisan, House-passed jobs bills that are awaiting action by Senate Democrats and learn more about the Plan for America’s Job Creators at jobs.GOP.gov.