In a rush to cinch political agendas before the end of the current Administration, well over a thousand new rules and regulations, on businesses and industry, have been imposed by federal agencies, over the past few months. That includes 192 major rules, with 16 more “in the hopper”. Major rules are identified as those rules which will each cost the economy more than $100 million to implement.
While there’s nothing new about an Administration finishing out its tenure with a surge of what’s called “midnight regulations,” the degree to which it is happening this time is unprecedented, says Karen Kerrigan, president and CEO of the Small Business and Entrepreneurship Council (SBE), Washington DC. In a special interview with the Big Sky Business Journal, Kerrigan said her organization which represents small businesses in the US, began watching the phenomenon unfold last May.
Both Republicans and Democrats typically end terms in a flurry of last-minute regulations. And, often in that crush, the regulations are not put through the rigors of the processes required by law of posting, publishing and gathering public input. “The process is sloppier and less transparent,” said Kerrigan, so under a law called the Congressional Regulatory Authority (CRA), the new Congress is given 60 days to act to approve or reject the regulations. This year, however, due to President Barrack Obama’s “proclivity” to finish his agenda and the extraordinarily high number of regulations, Congress is seeking a revision to the CRA which will allow them to “bundle” the regulations. Rather than deal with each regulation one at a time, The Midnight Rules Relief Act will allow them to be bundled into groups and dealt with in a more timely manner.
“We are concerned from a small business perspective,” said Kerrigan, especially since regulations disproportionately impact small businesses. Business in the country has already been impacted by more regulations than ever before throughout the Obama Administration, and besides the “midnight” regulations there are still others “in the pipeline.” And, the number is likely to climb even higher with half of December and two-thirds of January left to go, projected Kerrigan.
While the bill is currently stalled in the Senate, Kerrigan is optimistic it will be passed by the new Congress.
Besides being prolific, the regulations coming down the pike are broad. They touch upon almost every aspect of business and every kind of industry. Probably the most noted one is the overtime regulation which requires employers to pay wage salaried employees a minimum of $47,000 or else keep track of their hours and pay overtime. That regulation has been put on hold by a Texas judge and the Department of Labor has appealed to accelerate the court’s decision. It could be rendered moot, however, by the next Congress.
There is “a whole set of rules that has been passed out by the Department of Labor,” said Kerrigan. One would impose a lot of barriers and burdens on small independent businesses who might want to contract with the government, so much so that few would be able to do so. Small businesses and the competition they could bring would add value for the government, but “they have been squeezed and that is not good for the taxpayers,” said Kerrigan.
Another one from the Department of Labor has to do with “black listing.” A company which stands accused of any kind of unfair practices or workplace safety violations, even before it’s been determined to be true, can be prohibited from bidding on government contracts.
The Department of Energy “has a whole slew of regulations in regard to energy standards that would impact humidifiers, air conditioners, battery chargers, manufactured housing, etc. Standards that just add costs for manufacturers, who would have to make changes to meet the standards.
Another regulation change that would have a significant impact on agriculture has to do with how estates are valued for the purposes of taxation. The changes are very complex and they change rules that have been in place for a very long time.
The Consumer Financial Protection Bureau also has a host of proposed rules on short term loans and how the government will treat on-line lenders.
But despite the onslaught of regulations that must be dealt with, in general CEI is very optimistic about what the new administration will bring, said Kerrigan. “We are very optimistic about the policy agenda and its impact on business.”
That is especially true in regard to tax reform. “Tax reform is something our members have been clamoring about for a long time. It has been uncompetitive internationally,” said Kerrigan, “There seems to be alignment with the Congress and the president elect.”

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