The Regulatory Flexibility Act (RFA), passed completely in 1979 even though passage was all but certain in
1978, aims to reduce the costs of regulating agencies, in turn saving taxpayers money. The Government was realizing that the effects of regulation, on small businesses in particular, were having a negative market impact.
Prior to this Act, all businesses were treated the same, whether they were a small or large business. This, in turn, meant that a small business would need to file all the paperwork that a
large business did as well as abide by the same rules. The RFA sought to ease
the burden on small businesses across America thereby reducing their
operational costs. The Regulatory Flexibility Act would save both the Government and small businesses money in the long run.
Small businesses were becoming less and less competitive
in the market, which would pose a serious problem to the United States economy
if they would continue to lose their competitiveness. Small business employs
the majority of Americans and is an integral part to the economy. Through the
RFA, small businesses would save time and money restoring competition to their market.
The Regulatory Flexibility Act, which was approved overwhelmingly in each chamber, would allow small business to
finally have a reprieve from being treated as a large market entity. The RFA
would undergo subsequent revisions and additions
over time as well.
One central platform many presidential candidates run on
is the protection of small business interests, therefore many
presidents after the Carter administration added their own adjustments to the
RFA, with the help of Congress of course.
With the use of the Regulatory Flexibility Act, small businesses now need not file as many Government forms as they did before.
Equally, their regulators do not need to file the same forms as those for small
However, initial and final reports do need to
be filed. Differing though is the need to file for every change made. Now only
substantial changes to small business over the course of the year need to be
filed in the Federal Register. This simple change has saved time and money for the regulators and
those being regulated, streamlining the small business-Government
During the Clinton Administration, the savings of the Regulatory Flexibility Act started to be tabulated.
Over the course of time it is now estimated that the Regulatory Flexibility Act
has saved over 200 billion dollars for the Federal Government and small businesses. Moreover, following the United States’ lead, many developed countries have taken up their own forms of the Regulatory
Flexibility Act in efforts to help small businesses in an ever globalized
Even though the RFA was adopted in 1979, there have been constant revisions and additions over the years. As
domestic and global markets have become more advanced through further
integration, the need to develop the law further has become important. In doing so, the RFA has been able to adapt with a changing business climate saving the
Government and small businesses needed time and money.
Small business is a very important sector of the United
States economy. In fact, various types of small business entities provide for
the majority of jobs and job growth within the United States. Some may say that
as small business grows, so the does the entire economy.
In order to ensure the healthy growth of small businesses, the Regulatory Flexibility Act was
passed in 1979 to ease the burden on small businesses across the country,
limiting the amount of paperwork needed to be filed with the Federal Government in many cases. However, the business world is not a static
environment and as the world has become ever more globalized, laws have needed to adapt to the changing business climate.
During the Clinton administration, after their National
Performance review, the beginnings of the Small Business Regulatory Fairness
Act (SBREFA) began to be formulated. Later the SBREFA was passed under the
Clinton administration with the goal of reducing costs for small businesses even further and to ensure that
regulatory bodies do not create policies, whether intended or unintended, that
constrain the ability of small businesses to operate within the united States
Under SBREFA, regulatory
agencies need to perform a number of steps in order to enact and enforce a new
regulation. These steps are undertaken by each regulatory body, whether it be in agriculture, the environment, or even banking. The ultimate goal is to
ease financial burdens on small businesses which, unlike a large
company, usually cannot withstand enhanced regulation that would ultimately eat
up their profits and revenue.
For example, at the Environmental Protection Agency (EPA), when a new regulation is being developed, a board is created to examine
the costs of the intended legislature. Members of this board are not only EPA
officials, but members from the Office of Budget and Management as well, along with
other financial institutions within the Government. By
doing this the SBREFA achieves its intended goal of measuring monetary
consequences of the intended regulation.
However, there are times where the regulation does
increase the financial burden of a small business, but it is necessary due to a social imperative in enacting the regulation. This is usually the case within the EPA as their job is to
weigh environmental harms against financial harms. In many cases this
is especially so within the realm of mineral
extraction or the energy sector, as damage will be done to the environment and it is up to the EPA to limit the extent of damage.
The SBREFA takes into account many different factors that
are both weighed and measured to help accommodate the growth of small business.
Even though the Regulatory Flexibility Act was written in 1979, there have been necessary changes as the business market has changed since the law’s inception.
The SBREFA addresses some holes that were not addressed
within the original RFA, not because they were left out but simply because they
were not realized yet. Legislation with regards to the business sector is
reactive in many cases, not proactive. It is very difficult to see where the market will
be in ten years development–wise, so the legislation like the
SBREFA is needed to keep up with changing times.
While the Federal Government makes
the majority of decisions that affect day–to–day life for Americans, many of these actions, in a way, are outsourced to State agencies. These State agencies are the ones that many Americans interact the most with
depending on the problems or concerns they have in their day–to–day lives.
A State agency will perform many administrative functions that can go
unnoticed by the American public if everything runs smoothly. The welfare
office of a state is considered a State agency, even
though some funding comes from the Federal Government; funding also comes from State taxes.
Unlike overarching agencies, State agencies are responsible to the citizen of their
own particular state. Many times State agencies
perform semi-judicial actions in developing further regulation or
changing the regulation already on the books.
A State agency is made in the same structure of a Federal agency. The head of the State agency is
equally appointed by the governor of the state; much like the President appoints
the head of FEMA or the Defense Department. The workers are employees of the State and are held
to public accountability laws. It is their job to promote the social good.
In many ways a State agency
resembles that of a Federal agency, except their jurisdiction is different. There are State agencies to regulate trade and commerce, regulate their coastal waters,
law enforcement, and other needs deemed necessary by the public. A mandate of a State agency is usually very similar to
the Government agency it mimics.
Many times a State agency will
work with the corresponding Government agency in order to achieve the
best results for the citizens of the State, and because of the help of the Federal Government an equality of management can be formed from state to state.
State agencies receive funding from both the Federal and State governments. This allows for the State in many cases
to free up tax money allowing for more services to be provided. State agencies
also have a responsibility to work with smaller agencies at the local level.
Each level of government is intertwined in order for a more integrated process of social services to be provided.
A State agency also performs semi-judicial functions since not all changes to
regulation need to be handled by the State Legislature right off the bat. However, these actions are limited usually to
how the State agency will spend their allotted money for the year and where it will
At times, problems arise over the course of a
fiscal year that need quick action. It falls to the State agency to develop a rapid response. For example law enforcement can
run into financial constraints during Presidential campaigns. While
the State as a whole can know well in advance that the presidential aspirant
will be stopped, those
in the State can be a whole different question.
Then the State agency needs to respond quickly allocating funds for the proper protection, whereby also decreasing funds for the entire
year. If more is needed the State Legislature is then
petitioned, but the initial action is performed by the State agency.
In the long run, State agencies act and behave like their Federal
counterparts. The main difference is jurisdiction. While the Federal Government is responsible for the whole of the country, the State agency is responsible to their direct citizenry. Many of the same
processes from Federal to State are also mimicked creating an innate continuity within the system as a whole.