As President Barack Obama’s first term ends and second begins, it is an opportune time to reflect on the cost and sheer volume of new red tape his administration has created; analyze its impact on small businesses, and prepare for what’s next.
The Obama administration has pursued an active regulatory agenda. The overall regulatory burden is now $1.8 trillion annually, according to the Competitive Enterprise Institute, and this year alone new rules have added $215.4 billion in compliance costs. Small businesses are understandably concerned that the second Obama term will only add to this already heavy regulatory burden.
There has already been a wave of “economically significant” regulations ‑ those with an annual impact of $100 million or more ‑ that outpaced both the Clinton and Bush administrations. That pace slowed leading into the 2012 elections, but a second wave has been building.
We don’t know its exact size because the Obama administration has not published the required unified regulatory agenda in 2012, which identifies new rules that agencies plan to issue in the short- or long-term.
As Washington debates a fiscal cliff on spending and taxes, we should not forget the regulatory avalanche that awaits businesses in the New Year. Roughly 4,100 new regulations are in the pipeline, according to the government’s website. Not all these regulations will affect small businesses. Many will, however ‑ and the compliance costs for small firms will exceed that of their large competitors by some 36 percent.