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Small Business Regulations

The Small Business Administration National Ombudsman is coming to Cleveland for a public hearing on May 22. Michael Barrera is inviting company managers who say they're victims of excessive federal regulatory enforcement to come forward. He promises to take their testimony back to washington and straighten things out with various agencies. Barrera admits it's a new approach, and that businesses have good reason to be terrified of the government.

Michael Barrera: Anything run by humans is not going to be perfect. So we find that many of the actual agents in the field are not getting the message and they sometimes can be heavy handed, one agent might want to enforce something one way another agent might want to enforce it another. We want to make sure these agencies treat them fairly.

The hearings are part of the 1996 Small Business Regulatory Enforcement Fairness Act. Barrera says the act allows small business owners to criticize federal enforcement and regulations without fear of retaliation. He says the Bush administration is more active in pursuing it's goals, and the hearing in cleveland is part of the process. Barrera says the president has also ordered government agencies to get rid of what he calls unneeded regulations.

Michael Barrera: Regulatory fairness is on the radar screen. The fact that the president has let all his secretaries know that small business fairness regulatory fairness is needed. Not just because it's the right thing, it's good business. And so it rally is an attitudinal change we want to change the gotcha attitude to a help you attitude.

Small business owners could make more money if there were fewer rules to follow. According to the SBA, federal regulations cost American companies $840 billion a year. That breaks down to about $7,000 per worker, per year. A burden that's especially hard for small companies to carry.

Phil Fogarty is the vice president for Growing Opportunities at Weed Man, a small Euclid company that uses trucks like this one to spread weed killers and fertilizers. His workers use chemicals that are subject to a great many federal regulations and others concerning safety, training and disposal. He must also comply with federal laws covering taxes, insurance, workers compensation, job classifications and so on.

Phil Fogarty: I think it's great that someone wants to interact with us and at least take the time to see if there is something they can do to reduce the burden of regulation. I think it's a great step.

Fogarty has been in the business for 20 years. He knows first hand that what appears to be a small violation, can become a major issue when the federal government is involved.

Phil Fogarty: It's very intimidating. Just the paperwork you have to fill out and the fear of someone coming and saying you didn't fill out the paperwork properly. We've had audits here and because we didn't fill out the wind speed on certain days we were at least given a written warning that that was something that should be corrected. And I could see someone being scared to death about that. That someone was going to able to come in and shut them down because of the wind speed of not being recorded or some detail.

Others are nervous about the idea of trimming regulations. Lee Drutman is a spokesman for Citizen Works, a consumer and citizen advocacy group founded by Ralph Nader.

Lee Drutman: Certainly it's crucial to the health and welfare of society that regulations are enforced and that there are strict punishment when they are broken we can't go around letting employers mistreat workers or pollute our lakes and rivers or streams and our air.

The SBA ombudsman says 2 to 3 hundred regulations impacting small businesses have been eliminated under President Bush. He says the administration wants to make it easier for companies to comply with federal rules. Drutman urges caution.

Lee Drutman: I don't know what the 200 to 300 regulations are. But in general I think there's been a disturbing trend toward deregulation over the last 20 years not putting adequate controls on a lot of industries. If you look at the industries that were most heavily deregulated like the telecom industry, the energy industry. There has just been ruin in both of those sectors.

Reputable business owners also support regulations. They says the rules assure quality service to customers and shut down poor operators. But if the government is to overcome the fear of federal agencies it has a long way to go. SBA officials admit it's been hard to convincing some small business owners to testify because they are afraid of retaliation thought audits or extra inspections of their companies. However, SBA officials promise that anyone who comes forward with suggestions or problems can do so without fear. In Cleveland, Mike West, 90.3.

If you would like to testify at the hearing you must contact the Cleveland office of the SBA by the end of the day Monday, May 19, 2003.