[Congressional Record (Bound Edition), Volume 153 (2007), Part 2]
[Senate]
[Pages 1990-1991]
[From the U.S. Government Publishing Office, www.gpo.gov]




               COMPLIANCE ASSISTANCE FOR SMALL BUSINESSES

  Ms. SNOWE. Mr. President, I wish to take this opportunity to discuss 
an amendment that is pending before the Senate, which was offered by 
the ranking member of the committee, Senator Enzi, which I have 
introduced along with Senators Enzi and Landrieu. It is a bipartisan 
amendment to enhance compliance assistance for small businesses. Before 
I address the amendment, I wish to make a few comments about the 
minimum wage package we are currently considering on the floor.
  I thank the leadership on both sides of the political aisle for 
working together to develop a bipartisan consensus to raise the minimum 
wage. From the outset, Senator Reid and Senator McConnell set a 
bipartisan tone in forging a path to increasing the minimum wage. I 
also thank Chairman Kennedy and the ranking member, Senator Enzi, for 
working together to develop this bipartisan legislation as well. I 
think this is a very encouraging beginning to the 110th Congress and 
hopefully a time we can reach across partisan divides to enact 
meaningful legislation.
  I also commend Chairman Baucus of the Finance Committee, along with 
Senator Grassley, for working to draft the small business tax package 
that is also incorporated in the minimum wage bill. It was especially 
refreshing to see both Chairman Baucus and Ranking Member Grassley 
working so closely together to forge a compromise that addresses 
concerns on both sides of the aisle.
  By enacting the minimum wage, we will accomplish a legislative win-
win by increasing the minimum wage but also at the same time providing 
small businesses with significant tax and regulatory relief in a way 
that does not add to our Nation's deficit. That is a great example of 
the social and fiscal responsibility we must embrace.
  Small business tax and regulatory relief and increasing the minimum 
wage do not have to be mutually exclusive. I believe it is time to 
raise the minimum wage. It is certainly long overdue, since the last 
time the minimum wage was raised was back in 1997. Given the 
significant increases in the cost of living since then, most notably 
the rise in prices in housing, energy, and health care, families need 
to support themselves, and they certainly cannot do it on less than 
$11,000 annually.
  I am deeply concerned as well about the widening wage gap in America, 
which is creating a burgeoning economic divide when it comes to income. 
As the chart behind me shows--and I think it is very important because 
hopefully one of the priorities in this Congress will be to explore 
policies that will narrow the wage gap in America--according to the 
latest census data, in 2005, a household in the 90th percentile earned 
$114,000 more--or 11 times as much--than a family in the 10th income 
percentile. Moreover, income for households at the top has grown over 
the last 30 years, while income for households at the bottom has 
remained flat.
  A recent BusinessWeek article reported that increasing the minimum 
wage to $7.25 an hour could raise the pay for 16 percent of the 
Nation's workforce. So I am unequivocally supportive of this 
initiative. I also believe, as the ranking member of the Small Business 
Committee and previously chair of the committee, that we need to 
balance the minimum wage increase with a robust package of small 
business tax and regulatory reform to relieve many of the burdens small 
businesses continue to face.
  The fact is, small business is the engine that is driving the 
economy. It is the one segment of the economy that is actually creating 
jobs. Three-quarters of all of the net new jobs are created by a small 
business; therefore, it is in our interest to make sure we can 
guarantee for the future that this segment of the economy is going to 
continue to create jobs and to restore the long-term economic vitality 
of small businesses.
  Over the past 20 years, which is the subject of this amendment today, 
the number and complexity of Federal regulations has multiplied at an 
alarming rate. In 2004, for example, the Federal Register contained 
75,675 pages, an all-time record, and 4,101 rules. These rules and 
regulations impose a much more significant impact on smaller businesses 
than larger businesses. As illustrated by the chart behind me, it 
demonstrates unequivocally the disproportionate burden borne by small 
businesses versus large corporations in order to absorb the impact of 
more regulations and more rules. It illustrates the conclusion found in 
a recent report that was prepared by the Small Business 
Administration's Office of Advocacy that said in 2004 that the per-
employee cost of Federal regulations for small businesses with fewer 
than 20 employees was $7,647. In contrast, the per-employee cost of 
Federal regulations for firms with 500 or more workers was $5,282. This 
results in a 44-percent increase in burden for smaller businesses 
compared to their larger counterparts. Clearly, we must find ways to 
ease the regulatory burden for our Nation's small businesses so they 
may continue to create jobs and drive economic growth.
  As the leading Republican on the Small Business Committee, I continue 
to hear from small businesses across the country, in addition to my 
home State of Maine, which is essentially a small business State where 
98 percent of all employers are small businesses. But to give an 
example of the impact of the regulatory burden, I cite one company, 
Hammond Lumber Company, which faces the increased cost of regulatory 
compliance. It is a shining example of the American dream come true. It 
has been a family-owned company for three generations. They have been 
thriving in the State of Maine and serving not only Maine but all of 
New England for more than 50 years. It grew from a company of 41 
employees in 1976 to over 300 employees in 2006. Hammond Lumber 
exemplifies the tremendous spirit of the American entrepreneur. It also 
demonstrates the pivotal role small businesses play in creating jobs 
and driving our Nation's economy. However, as Hammond Lumber has grown, 
so has its regulatory burden. In 1976, its total regulatory cost per 
employee equaled $98. Last year, it was $441 per employee. I had the 
opportunity to tour the company. I talked to the owners and talked to 
the employees. Unquestionably, it is a thriving company. They told us 
that the burden they were enduring as a result of the regulatory 
compliance was clearly having adverse consequences.
  So we need to level the playing field for small businesses and make 
it easier for them to comply with complex regulations. All too often, 
small businesses don't maintain staff, don't have the financial 
resources to comply with Federal complexities, rules, and regulations. 
This places them at a disadvantage compared to larger companies. It 
also reduces the effectiveness of the agency's regulations. If the 
agency cannot describe how to comply with its regulations, how can we 
expect a small business to figure it out? That is why I have offered 
this amendment, along with Senator Enzi and Senator Landrieu, which 
would clarify the

[[Page 1991]]

small business requirement that exists under Federal law.
  Our amendment is drawn directly from recommendations put forward by 
the GAO and is intended only to clarify an already existing requirement 
which passed unanimously in the Senate, became law, back in 1996 when 
we passed the model legislation to ease the impact on small businesses 
with respect to the Federal bureaucracy creating rules and regulations. 
That legislation that became law was intended to ensure that the 
Federal Government and all of the agencies consider the impact to small 
businesses of these proposed rules and regulations.
  One of the most important provisions of this act was a requirement 
that Federal agencies work to produce compliance assistance materials 
to help small businesses satisfy their regulatory obligations. 
Unfortunately, the GAO has discovered that Federal agencies have 
ignored these requirements or failed miserably in their attempt to 
satisfy them. GAO also discovered that the language of the act is 
unclear in some places about what is actually required of small 
businesses. Consequently, small businesses were forced to figure out 
all these complicated regulations on their own. Obviously, this makes 
compliance that much more difficult to achieve. So my amendment is 
drawn specifically and directly from the GAO. It clarifies when a small 
business compliance guide is required, how a guide shall be designated, 
how and when a guide shall be published, and that the agency make the 
guide available on the Internet. These are commonsense, good government 
reforms, which will provide major relief for small businesses at 
virtually no cost to the Federal Government.
  I think it is very important that this amendment be adopted because 
all too often we have discovered--as underscored by GAO in their recent 
report--that the agencies find ways or discover loopholes to circumvent 
the requirement. It is that much easier because they don't want to have 
to bother to help small businesses comply with regulations, and they 
use the rationale--or the excuse, I might say--of the ambiguity in law 
that doesn't allow them to be clear or to provide the assistance 
directly to small businesses. So we want to remove the ambiguity and we 
want to be sure that the amendment as represented here today, which 
would be translated into the statute, will be abundantly clear and 
specific in terms of how the agencies are going to allow small 
businesses to comply with these regulations, with the assistance that 
could be provided by these agencies as well.
  I think it is also important to stress that this amendment does not 
place any additional arduous requirements on small businesses. There 
are no additional enforcement measures. We are just saying that this is 
important to clarify, so that agencies don't have an excuse for 
avoiding compliance with this regulation and also providing assistance 
to small businesses, and doesn't undercut an agency's ability to 
enforce its regulation to the fullest extent they currently enjoy.
  Furthermore, this amendment was introduced in the form of a bill that 
enjoyed broad bipartisan support. It was also included last year in the 
Small Business Reauthorization Act that was unanimously reported out of 
the Senate Small Business Committee in the 109th Congress. This isn't 
any new ground. It is straightforward. It will help small businesses, 
which are doing so much to create jobs in our economy. Frankly, we 
ought to do more for small businesses. I think this is a sector of our 
economy which we have overlooked and ignored.
  There are so many resources that we could make available to small 
businesses for a minimal cost that I think could leverage job creation 
throughout this country. I know, in working with the new chair of the 
Small Business Committee, Senator Kerry, that we are going to look to 
the future to see what kind of programs we can build upon, what kind of 
efforts we can make that can help small businesses thrive and flourish 
and create the jobs that so many parts of our country desperately need 
and require.
  I am looking forward to working with Chairman Kerry in that regard, 
also with Chairman Baucus and the Senate Finance Committee because the 
underlying bill includes some very significant tax relief measures. 
Unfortunately, they will expire in the future. In the short term, in 
some cases, such as small business expensing, I think we have to 
consider ways to make that expensing requirement permanent because 
small businesses clearly deserve to have continuity of that provision 
and the certainty that it is going to be there.
  I applaud Chairman Baucus for undertaking this initiative as the 
first action as chair of the Finance Committee in the markup, and it 
clearly is going to go a long way toward helping to bolster a very 
significant part of our economy, and that is, of course, small business 
growth.
  We want to do more, we should do more, and we can do more.
  Again, I urge Members of the Senate to support this amendment.
  I yield the floor.

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