On Wednesday, Sen. Joni Ernst introduced legislation that would help shield small businesses from executive overreach. The bill—called The Prove It Act—provides Main Street with the tools to help contend with government overregulation. Prioritizing these job creators in Washington is long overdue.
Small businesses—which employ nearly half the country’s workforce—have been plagued by persistently high inflation and threatened with higher taxes and more regulations for two years. Their source of capital has also been jeopardized. Following the recent banking crisis, Biden administration officials seem to prioritize big banks over the community financial institutions that provide roughly 60 percent of small business loans.
Ernst echoed this sentiment when introducing the bill: “For too long, federal bureaucrats have ignored the concerns of our job creators and the negative impact their many rules have on hardworking small and family-owned businesses. One-size-fits-all regulations don’t suit Iowa’s entrepreneurs, and that’s why I’m fighting to ensure our small businesses are heard and considered in future regulatory mandates from Washington.”
The legislation fulfills a key pillar of the Job Creators Network’s American Small Business Prosperity Plan—an eight point policy blueprint launched last year– by reducing the regulatory burden on small businesses. JCN provided valuable input to Sen. Ernst from the small business community about the disproportionate impact regulations have on entrepreneurs.
The legislation requires government agencies to consider the costs new government red tape will have on Main Street businesses. It provides small businesses and organizations representing their interests a seat at the table when government regulators are weighing whether a proposed rule would have a negative impact on entrepreneurs.
Small businesses would subsequently be exempt from any rule in which an agency fails to meaningfully participate in the petition and review process.
The bill would bolster existing law that federal agencies have been side-stepping at the expense of small businesses. According to an investigation conducted by the House Committee on Small Business, many government agencies in Washington are “failing to properly implement” statutes intended to shield small businesses from overburdensome regulations.
For example, The Regulatory Flexibility Act—signed into law by President Jimmy Carter—intended to address the “disproportionate impact” of government red tape on entrepreneurs. Fast forward to today and government agencies—ranging from the Environmental Protection Agency to the Department of Labor—are essentially ignoring the law.
Government red tape has hit small businesses particularly hard under the Biden administration. A new report finds rulemaking conducted by federal agencies last month added more than $40 billion in compliance costs for businesses. And polling from the Job Creators Network Foundation finds that three in five small businesses nationwide say complying with government regulations is time-consuming.
Sen. Ernst’s legislation is a much-needed breath of fresh air amid the current war on small businesses. A majority of small business owners say Biden administration policies have been a net negative for entrepreneurs. And 63 percent are concerned about the possibility of being forced to shut their doors.
Small business regulatory protections are in dire need of restoration. Passage of The Prove It Act would be a step in the right direction. Sen Ernst’s colleagues—regardless of political affiliation—should support it. It’s time for our elected leaders in Washington to prioritize Main Street.
Alfredo Ortiz is the President and CEO of Job Creators Network and author of The Real Race Revolutionaries: How Minority Entrepreneurship Can Overcome America’s Racial and Economic Divides.