Overregulation is hurting business, getting the rules right is the key to growth

Regulations, when properly constructed, help enforce laws passed by Congress. A certain level of government regulation is necessary to ensure public safety, protect the environment, and promote competitive and free markets.

However, excessive regulations are burdening the workforce, time, productivity and budgets of American businesses of all sizes, holding back economic growth and wages across the country.

In July 2024, the House acquitted him Growth and necessary opportunities with the goal of the US achieving at least 3% economic growth, which is essential to expanding opportunities for American workers, increasing wages and improving living standards. The key to achieving sustainable 3%+ economic growth is growth-oriented public policy, including regulatory policy.

As part of the Chamber’s State of American Business 2025 program, lawmakers and regulatory experts discuss the impact of regulatory overreach in the US, the significant costs imposed by regulations and opportunities to course-correct this year.

The impact of over-regulation on businesses and workers

Across the country, businesses and workers are spending a lot of time and money navigating regulatory requirements.

According to the last US Chamber and MetLife Small Business Index51% of small business owners say regulatory compliance requirements make it harder for them to grow their business.

During her State of American Business 2025 address, US Chamber President and CEO Suzanne P. Clark emphasized the urgent need to roll back the worst regulatory assaults of the past four years to create opportunities for workers and businesses to thrive.

“As it stands, this unprecedented bureaucratic micromanagement of business will cost the economy $1.8 trillion and flow into the lives and pockets of Americans through higher prices, lower wages and fewer jobs,” Clark said. . “And we will continue to work with the administration — as we did in President Trump’s first term — on this shared priority.

While some federal regulations are intended to promote change or positive outcomes, they often have unintended consequences. Doug Holtz-Eakin, a former director of the Congressional Budget Office and current president of the American Action Forum, says costs are costs when it comes to the impact of regulations on businesses. “If you’re a businessman, you have to cover the costs, whether it’s a tax that you have to pay or another way of achieving the same thing – a regulation that you have to comply with. This hurts your ability to hire people. This hurts your chances of expansion. It undermines all the things that we think of as productive in the economy, and that’s a headwind to growth.”

Regulatory burdens are not borne by businesses alone. They are also passed on to consumers. “[Regulations] constitute a massive hidden tax paid by the American people through lower wages and higher prices for the goods and services we buy every day,” said Rep. August Pfluger (TX-11), Speaker of the House of Representatives of US Republican Studies Commission.

“I worry about this continued expansion of the regulatory state as a real headwind to American prosperity,” says Holtz-Eakin.

Susan Dudley, the former director of the regulatory branch of the Office of Budget Management, points to the 1970s, ’80s and ’90s as evidence that increased competition and reduced regulations led to “huge improvements in economic growth and social welfare because [before]we had innovations that were limited by regulated activity.”

What’s more: The regulations not only increase costs for businesses, but also the amount of time business owners must spend filling out government paperwork to comply with federal regulations. And this puts a strain on business owners’ productivity and their ability to run and grow their business.

“The Biden administration’s regulations have imposed a paperwork burden that equates to 360 million hours,” says Rep. Brandon Gill (TX-26). “If one person were to complete all those documents, it would take about 41,000 years.”

Role of Congressional Review Act

Dudley says the new Congress has a 60-day period to review proposed regulations (also known as rules) issued at the end of the last administration that are currently not final and pass a joint resolution rejecting them. President Donald Trump could sign these resolutions into law, overturning the proposed regulations and creating a higher burden for agencies to issue the same or similar rule in the future without congressional approval.

Regulations issued after mid-August can be overturned using the Congressional Review Act (CRA). The House has outlined regulations that Congress must take immediate action to protect consumers and businesses.

The Long Game: For regulations issued before August 2024 and which have already entered into force, the process becomes much more difficult. Cutting these regulations cannot simply be done with a joint resolution of disapproval from Congress and a signature from the President. “To revise or repeal a regulation, agencies have to go through all the same steps they went through to issue it in the first place,” Dudley says. “It’s a long process.”

“Thousands of new regulations that affect not only business, but affect jobs and our ability as a capitalist nation to do business and compete around the world,” said Rep. Pete Sessions (TX-17), Co-Chair of the DOGE Group. “We will work with the U.S. House to ensure that we not only address these needs, but ensure that we have a tax code that ensures as America moves forward that capitalism and the rule of law are important behaviors where the American people will stand by.”

Potential benefits of mitigation regulations

Reduced regulations give businesses more flexibility to run and grow their business, creating more opportunities for workers and communities.

Removing redundant regulations and associated costs will lower costs and help control inflation. “Take those costs out of the system and you don’t have to raise prices to cover it,” says Holtz-Eakin.

“Business owners and managers in every industry feel the pain of bureaucratic micromanagement. Consumers and workers experience it in the form of higher prices, lower wages and fewer jobs,” Clark wrote in one. Wall Street Journal op-ed after the November 2024 election. “Some will view the coming deregulation as an illegal power grab. It’s the opposite. Deregulation takes economic power out of the hands of those who did not earn it and do not know how to use it. It empowers consumers, workers and business leaders.”

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Exceeding regulations are a strain on businesses’ time, productivity and finances. They contribute to less economic growth and lower wages for workers.

Regulatory reform is one element of achieving economic growth, and policymakers should seize the opportunity to cut burdensome regulations through the CRA to grow our economy and help American workers and businesses achieve their American Dream.