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Washington Watch - June 15, 2011

Senate Rejects Amendment Addressing The Impact Of Regulations On Small Biz

Although a majority of the Senate voted to support Senator Olympia Snowe’s (R-Maine) amendment to provide additional protections against federal regulatory burdens, the legislation fell short of the 60 votes needed to pass. In a disappointing 53-46 vote, the Senate rejected strengthening the Regulatory Flexibility Act, which requires agencies to consider the impact that proposed regulations would have on small businesses.

Snowe’s amendment would have required agencies to also consider the indirect impacts on small business and would have expanded the RFA’s requirements to informal guidance documents. In addition, the legislation would have allowed companies to challenge proposed regulations in court, while requiring additional federal agencies to convene small business owners for input on economically significant rules. Lastly, the measure instituted a periodic review of significant agency rules regarding their impact on small business.

The NASE has been highly supportive of the Regulatory Flexibility Act because it makes sure that lawmakers are mindful of a potential regulation’s inherent effect on the nation’s smallest businesses. It was unfortunate that this amendment did not pass, but we hope that the larger bill, dealing with the reauthorization of the STTR and SBIR federal programs for small businesses does finally achieve passage on the Senate floor.

While this amendment failed to pass the 60 vote threshold, the House will again review Republican-backed regulatory overhauls as House Judiciary Chariman Lamar Smith (R-Texas) will offer more legislation with both regulatory “lookback” provisions and requirements of agencies to consider indirect effects of regulations on small businesses.

Quick Look: Medicaid Overhaul Faces Opposition From Senate Democrats

Senate Democrats recently established enough votes to block the proposed Medicaid overhaul, as forty-one sent letters to President Obama opposing the drastic changes included in the GOP-backed resolution.

Several key Democrats, such as Majority Leader Harry Reid (Nev.), Finance Chairman Max Baucus (Mont.), and Budget Chairman Kent Conrad (N.D.), and Connecticut independent Joe Lieberman did not submit letters of opposition in a possible move to retain flexibility during the upcoming deficit negotiations.

The budget proposal would implement steep cuts to Medicaid spending by converting the federal appropriation into block grants to states. Republicans believe the block grant proposal will control federal spending, while giving the states flexibility to alter programs based on state needs. The letter’s signers oppose the policy as it caps federal spending on a program that currently fluctuates based on need.

What Does Swipe Fee Legislation Mean To You?

Last week, Washington Watch reported that legislation bent on delaying the new limits banks are allowed to charge retailers for debit and credit transactions had failed passage in the Senate. The existing law, passed under the financial regulatory overhaul of 2010, has been a battle between banks, who say the swipe fees help pay for other banking services and administration, and retailers, who say the unpredictable charges make it hard for them to stay competitive by accepting credit and debit cards. On the recommendation of the Federal Reserve, the current law set swipe fees at a flat 12 cents per transaction, as opposed to the more common fee of one percent of each transaction.

The original legislation which enacted the fee structure received bipartisan support. The NASE knows that it is essential for small companies to be able to accept cards as a form of payment, as these cards have been growing ever more popular with consumers in the past several years. We support legislation that allows micro-businesses and the self-employed, who do not always have the built-in reserves to pay for the fees like their big business counterparts, to keep up with the latest technological demands of their customers. 

Though it failed, the legislation blocking the July implementation of the limits would have put the implementation on hold for several months to allow research to be conducted on how the new fee structure would affect financial institutions.

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