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Cass R. Sunstein

This Secret Weapon Could Kill Needless Regulation

The Regulatory Flexibility Act of 1980 contains tools for invigorating small businesses. Trump should use them.
Cut it.
Photographer: Carsten Koall/Getty Images

Small businesses and startups are responsible for a big chunk of U.S. economic growth and job creation. Unfortunately, many of them are stymied by state and federal regulation. The good news is that the Regulatory Flexibility Act, originally enacted in 1980, could provide a lot of help. If the administration of President Donald Trump starts to pay attention to it, it could give that tired old law a lot more energy – and promote important economic goals.

The law focuses on “small entities” -- not only small businesses but also small nonprofits and small governmental units such as towns and school districts. It recognizes that small entities often bear no responsibility for health and safety problems that give rise to regulation; that regulation deters potential entrepreneurs from innovating; that treating small entities the same as large ones impairs productivity; that regulation is often a barrier to entry; and that it can be easy for big companies, and tough for small ones, to comply with expensive federal mandates.