Wednesday’s CBS Evening News took a sympathetic look at the plight of small businesses that wrestle with expensive federal regulations as the show announced President Obama’s announcement that he would push for reform. Host Katie Couric referred to federal rules as a "huge pain in the neck and the bottom line," as she introduced the piece.
Correspondent Dean Reynolds relayed the pessimistic view of one small business owner who has "seen regulatory reform come and go," with bakery owner Robert Paqueti complaining that in the end there "tends to be more government, more regulations, more cost."
After recounting a number of confusing points of regulation and the fact that such rules cost thousands of dollars per employee - hitting small businesses even worse - Reynolds turned to another small business owner who "argues that a lot of the rules are often redundant, inefficient and expensive."
Below is a complete transcript of the report from the Wednesday, January 19, CBS Evening News :
KATIE COURIC: For a small business owner, they’re a huge pain in the neck and the bottom line - page after page of government rules and regulations. Now, President Obama is ordering a top to bottom review, and Dean Reynolds reports many business owners are saying it’s about time.
DEAN REYNOLDS: At Red Hen Bread near Chicago, owner Robert Paqueti says he’s seen regulatory reform come and go.
ROBERT PAQUETI: The end result tends to be more government, more regulations, more cost to the business owner.
REYNOLDS: He runs three stores in the Chicago area providing bread for more than 400 restaurants. And in the baking business, there are plenty of rules to follow. For example, the FDA oversees frozen cheese pizzas, but not frozen pepperoni pizzas, which are under the Department of Agriculture. Another FDA rule tells you what percentage of cherry pies must be actual cherries. And there’s a Pentagon rule on the making of brownies that runs to 26 pages.
According to a Small Business Administration study last year, federal regulations cost companies with fewer than 20 workers an average of $10,585 per worker, compared to $7,755 an employee for large firms.
The Government Printing Office says that in 2009 there were 163,333 pages in the Code of Federal Regulations. And experts say that when you put them all together, there’s a lot of overlap. Take water heater regulations. The EPA recommends setting them no higher than 120 degrees, while the federal workplace watchdog OSHA says the top is 140 degrees. Could the President’s new directive help? Kevin Lotek hopes so. He’s the president of Reliable Trucking in Lansing, Illinois, operating 350 tractor trailers from eight cities, a $50 million business.
KEVIN LOTEK, RELIABLE TRUCKING: These regulations can make or break a company.
REYNOLDS: He argues that a lot of the rules are often redundant, inefficient and expensive.
LOTEK: In the last seven years, our company has doubled our safety department, due to the changing regulations.
REYNOLDS: The stakes are high.
PAQUETI: I think there’s a lot of money sitting out there, and the reason people aren’t spending it is because they’re just unsure of what’s coming next.
REYNOLDS: What’s coming next on the regulation highway. Dean Reynolds, CBS News, Chicago.
