WASHINGTON (CN) – President Obama has ordered all federal departments and agencies to consider the burdens placed on small businesses when enforcing current regulations or initiating new ones.
“In the current economic environment, it is especially important for agencies to design regulations in a cost-effective manner consistent with the goals of promoting economic growth, innovation, competitiveness, and job creation,” the president said in a memorandum to the heads of all departments and agencies issued along with his executive order requiring them to review the economic impact of their actions.
Under the Regulatory Flexibility Act, federal agencies are allowed discretion in the enforcement of regulations required by law. This flexibility can take the form of extended compliance dates; simplification of reporting and compliance requirements through streamlined forms and electronic filing options; and different requirements for large and small firms and granting partial or total exemptions due to disparate economic impact on small firms.
The act allows, and Obama’s order mandates, that agencies specify performance objectives to achieve regulatory goals rather than laying out the specific means of reaching the goal. Another alternative to specific regulatory compliance is to provide economic incentives to encourage desired behavior.
Obama’s order also mandates that all proposed new regulations include a determination that the benefits of the regulation justify the costs, and that the regulations impose the least burden possible on society.
As for existing regulations, Obama ordered all departments and agencies to prepare a plan to begin retroactive analysis of all regulations that are considered to have a “significant” economic impact on regulated firms, to determine if they are outmoded, ineffective, insufficient or excessively burdensome.