Podcasts

Interview with Karen Kerrigan: Regulatory Reforms Update for Small Businesses

Karen Kerrigan, CEO, and President of the Small Business and Entrepreneurship Council (SBE), addresses recent deregulatory efforts that are having a positive impact on small businesses and provides an update on which areas the SBE is currently working on with lawmakers.

The Small Business & Entrepreneurship Council is a prominent advocacy group dedicated to protecting small business interests and promoting entrepreneurship and business growth. Karen Kerrigan frequently appears before Congress to weigh in on the important issues affecting entrepreneurs and the economy.

 

TRANSCRIPT

Greg Corombos: Our guest this week on Expert Insights is Karen Kerrigan. She's President of the Small Business and Entrepreneurship Council. One of the group's main points of focus is easing the regulatory burden on businesses. So what regulations have changed or been scrapped in recent months? And what is the actual impact of those decisions on businesses? And Karen, thanks so much for being with us.

Karen Kerrigan: Oh, thank you, Greg. Always a pleasure.

Greg Corombos: The last time we spoke, you were quite encouraged by the regulatory rollback we're seeing in Washington. How would you describe the pace now, and more importantly, the importance of the regulations being considered?

Karen Kerrigan: I think it's been quite meaningful and significant in terms of the reforms and the effort that has been put forward by the administration. When the President was, you know, when he took office, he essentially released a couple of the executive orders that directed the agencies to go full bore and look at outdated regulation, listen to the small business community, and find things that either need to be repealed, modernized and streamlined. And those efforts are going quite well, on a number of fronts. You know, practically every agency from the Department of Labor to the EPA, on Health and Human Services, the IRS. So on a range of fronts has been very, very encouraging. And back, just recently, the Council of Economic Advisers at the White House, they put out a report that found that consumers and businesses are saving about $220 billion per year, and will continue to after these rule changes go into full effect. So, you know, regulation disproportionately impacts small businesses. And so it's good to see the regulatory agencies reaching out, it's good to see those in charge of Small Business Outreach at the SBA, making a continuous effort to talk to small businesses to identify rules and regulations that need to be again, either repealed, modernize streamlined, or done a different way, based on our modern economy. So things are looking good. But there are still ways to go, Greg,

Greg Corombos: I know some regulations are more impactful than others. So as you look at some of those key areas in labor, health and environment are certainly three of the biggest areas of all, which changes, whether it's streamlining or repealing all together, are business owners getting back to you and saying, hallelujah?

Karen Kerrigan: Well, you know, I think just broadly speaking, you know, during the weak economic recovery, prior to this administration, and there was just a lot of concern about the threat of new regulation on a regular basis, you know, new rules and regulations that came out of various different federal agencies creating a lot of uncertainty. And when small businesses have that uncertainty, they're not investing, big businesses are not investing. So that does impede growth, economic growth, impedes job creation and impedes the obviously small businesses, their revenues and the opportunities they have in the marketplace. So there's sort of been a sort of high-level feeling of sort of freedom, that they can focus on their business, and there won't be any new big rules coming out of Washington that will negatively affect their business. So I think on the big ones, I mean, certainly on the Department of Labor, there was, you know, the big overtime rule that was pushed in the Obama administration that was put on hold. There was a court order, where the judge said that the deal would have to go back and revise that rule, it just doubled. It doubled the salary, overtime pay...a lot of things that really would hurt a lot of small businesses. And so that is still being in the process of being revised. And that was a big one. I would say the other key ones have been, has been health care, because the cost of health coverage continues to be a big pain point for small businesses, particularly in their effort to compete for workers in the marketplace. They want to be able to offer coverage, and that cost of coverage is very high. So there's been a lot of rule changes at HHS, in concert with the Department of Treasury that, you know, produced, you know, better health reimbursement accounts, that produced more practical short-term, limited-duration plans, that produce association health plans that will allow small businesses to pool and create more market power for themselves, that they can compete for lower prices and more choices. So there's been a plethora of new rules, positive rulemaking on the healthcare front, that are really bringing more choices and lower costs in the health insurance market. And that's a really positive thing. From a small business perspective, I know it's going to continue. More, we expect more changes really soon to create even more choices and affordability. That's huge for small business. There's other stuff on the IRS. And, again, Greg, we're just working on so many fronts. We've got to revise the whole regulatory process. It's so outdated in terms of how rules are being made. I mean, it's 50 years old, the Administrative Procedures Act, which governs how the sausage is made, as they say. So we're trying to get something moving in the Congress, that would change that whole process so that small businesses have more of a voice, there's more accountability in the system, so that regulators are not creating rules in a vacuum and are listening to those who will be regulated before they move forward with final rule. So again, a lot to be done. But there's a lot of progress that has been made.

Greg Corombos: You mentioned what you hope to see get through the Congress. And you put out a report earlier this year talking about a lot of things that had gotten done in the first two years of this administration, and some things that got held up in Congress. The House and previous Congress had passed them; the Senate didn't get them done. Now, of course, we've got different parties controlling the two houses, so we’re at loggerheads on these issues as well? Or are you finding some common ground on some of these things?

Karen Kerrigan: You know, Greg, there's common ground. I think the big issue that we’re so hopeful on in the last Congress was a bill called Jobs Act 3.0. And that bundled about 30 capital access and capital formation bills that would have done a lot of things to change rules and regulation and compliance at this outdated securities rules at the SEC, the Securities and Exchange Commission, to really boost capital formation and capital access, modernize a lot of rules that would be very helpful to startups and to growth-oriented businesses and their search for capital. So that bundle of bills passed the House, I think, with only two people voting against it. So it was over 400 positive votes, a big bipartisan victory for us. But it did get tied up on the Senate side, we thought they're going to act on it. And we had the government shutdown and all that, and it didn't happen. Now in this Congress, there is still bipartisan support for these pieces of legislation, both on the House side and the Senate side. Right now we're moving them individually, which takes a longer period of time. But also, Greg, as you probably know, turning on your TV and reading the headlines, the House is focused on so many other things in terms of investigations, you know, a pretty massive amount of oversight on the administration. And that really does, you know, take away a lot of time that can be spent on legislating. And so this capital access issue hasn't been a big priority, particularly in the House Financial Services Committee where they really do a lot of oversight on a number of fronts. But we still remain hopeful, there's time left. We have to be hopeful, right? And we think the new members, particularly on the Democrat side, you know, those who are in those sort of tight districts, those toss-up seats, those lean republican seats where a Democrat may have won, they want to bring back...they want to show what they did for their districts. And so there is a lot of noise from those members to actually do these types of bipartisan bills that will make a difference for small businesses and entrepreneurs

Greg Corombos: There is just a minute or two left in our conversation here. And I know regulatory reform is a huge priority at the SBE Council. But I know there are other things you're focused on as well. So what else are you focused on? What else do you hear from small business owners about ways that policies in Washington can make a big difference?

Karen Kerrigan: Well, I think a couple of things are on our radar screen right now. We do have a lot of members that are impacted by trade and what's happening in global markets. The USMCA agreement, which is a modernized NAFTA, we're really working on getting that through the Congress. I think that probably won't be addressed until September. You know, on the whole trade issue in general, and the whole tariffs issues, we've always told the administration, the longer you know, the tariffs and the uncertainty with China, and just sort of using tariffs as a tool, you know, continues, the deeper and the broader the impact on the economy and small business. So we're hearing from a lot of our members now, retailers, the construction industry, etc, That they are being impacted by those, and it is having a competitive impact. So we are pushing the administration, let's get something done with China. We realized the importance of intellectual property and getting that done and having an enforceable agreement there. USMCA. And just supporting the administration in general on a lot of its efforts to cut trade agreements, because we have so many members that are looking to go global. We live in a platform-based economy and it's a lot easier, but we still need to lower those barriers to trade so that...it's a big issue for all business groups in Washington. And certainly, it's a big issue for small businesses.

Greg Corombos: Well, Karen, always great to talk to you. And we've learned a lot about different ways that small businesses are benefiting because of the work that you do and what others are doing in Washington. Thanks very much for your time today. We always appreciate it.

Karen Kerrigan: Thank you so much, Greg.

Greg Corombos: Karen Kerrigan is President of the Small Business and Entrepreneurship Council. I'm Greg Corombos reporting for Expert Insights.

 

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