[Congressional Record Volume 158, Number 76 (Thursday, May 24, 2012)]
[Senate]
[Page S3620]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STRUGGLING AGAINST BUREAUCRACY
Ms. SNOWE. Mr. President, this week is National Small Business Week,
which is a time to celebrate the entrepreneurial spirit behind American
enterprise. But, as I was reminded by a piece that was published
recently in the Wall Street Journal, it is also a time to remember how
government can better serve the small businesses in America. In today's
economy, the Nation needs an effective regulatory environment that
allows small business to grow and create jobs while keeping our
families and environment safe. I ask unanimous consent to have this
article printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Wall Street Journal, May 22, 2012]
The Red Tape Diaries--One Small Business Owner's Struggle Against
Bureaucracy
(By Nicholas N. Owens)
This week is National Small Business Week, a time to
celebrate the ingenuity of entrepreneurs--and to consider how
government can provide better service to the small
enterprises that form the backbone of American industry.
Consider the Environmental Protection Agency official who
described his agency's work as akin to crucifixion. In a Web
video from 2010 that recently came to light, Al Armendariz
likened regulatory enforcement to the Roman imperial practice
of crucifying people to serve as an example to others:
soldiers would go to ``a town somewhere, they'd find the
first five guys they saw, and they'd crucify them,'' he
explained. ``And then, you know, that town was really easy to
manage for the next few years.''
Mr. Armendariz's point was that making examples of certain
businesses or industries would serve as a deterrent to ensure
compliance. But the way he illustrated his point provoked
outrage, and within days he had resigned from the agency--
proving again that the journalist Michael Kinsley was right
to say that a ``gaffe'' in Washington is when someone
accidentally tells the truth.
I know first-hand that Mr. Armendariz's view is a truthful
representation of how many regulators view their function.
While serving as the Small Business Administration's (SBA)
national ombudsman from 2006 to 2009, I worked with small
business owners who believed they were falling victim to
unfair or excessive regulatory enforcement. All too often, I
saw federal regulators take a stridently adversarial stance
toward the industries they oversee.
In 2007, for example, I was contacted by Rob Latham, who
runs a small Internet sales company in Greenville, S.C. Mr.
Latham started his business in 2005 and was prepared to work
hard to make it succeed.
He wasn't prepared for how easily a run-in with federal
regulators could bring him to the brink of ruin. That's what
happened in 2007 after he found himself embroiled in a
months-long dispute with the EPA over a shipment of engines
he had imported.
The issue came down to labeling. Although the product Mr.
Latham was importing met the EPA's environmental standards,
regulators ordered the shipment seized because it contained
labels that could be removed with a razor blade. (In other
words, they were somewhat vulnerable to damage or tampering.)
Mr. Latham thought the dispute could be easily resolved but
was surprised by the EPA's intransigence--its dedication to
junking his entire shipment--when he tried to work with them.
Mr. Latham wasn't ignorant of the regulations that governed
his business--quite the opposite. He had carefully studied
the rules that governed the products he was importing, and he
thought he had taken all appropriate steps to ensure
compliance. But as a small business owner with no in-house
legal team, he had little idea how complicated the
bureaucratic process would be.
He met with regulators in Washington to resolve the issue
but found that they doubled down on their position, becoming
hostile and aggressive.
That's when he reached out to my office. Hearing of his
plight, I contacted the EPA on his behalf and started working
with regulators to resolve the case. Soon thereafter, the
regulators relented and allowed Mr. Latham's imports to move
forward--but only after he paid a substantial penalty of
$10,000, an apparent tribute to the regulators to allow them
to save face.
The story ends happily: Once the EPA dispute was resolved,
Mr. Latham's business grew swiftly. Today his company boasts
three warehouses and more than 20 employees.
But had Mr. Latham not connected with my office, he might
have lost his business. It's frightening to think what other
small business owners encounter in similar situations. What
about those who don't know where to turn, or who aren't lucky
enough to stumble across the right advice or the right
advocate?
As of 2008, small businesses faced an annual regulatory
cost of $10,585 per employee, according to an SBA regulatory
impact study published two years ago.
So was Rob Latham crucified? That's too strong a word,
because it's likely he wasn't specifically targeted--he was
simply caught up in a web of red tape and bureaucracy, and
the regulators had little interest in helping him get through
the impasse. His struggle is a case study in why we need a
regulatory regime that's fair, accountable and allows our
economy to grow again.
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