Impact of Overreaching Regulations on Businesses and Workers
Impact of Overreaching Regulations on Businesses and Workers
Across the country, businesses and workers are spending too much time and money navigating regulatory requirements.
According to the latest U.S. Chamber and MetLife Small Business Index, 51% of small business owners say regulatory compliance requirements make it harder for them to grow their business.
During the 2025 State of American Business address, U.S. Chamber President and CEO Suzanne P. Clark stressed the urgent need to roll back the worst of the regulatory onslaught 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 trickle down into Americans’ lives and pocketbooks through higher prices, lower wages, and fewer jobs,” said Clark. “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 meant to spur positive changes or outcomes, they often have unforeseen consequences. Doug Holtz-Eakin, a former director of the Congressional Budget Office and current president of American Action Forum, says costs are costs when it comes to the impact of regulations on businesses. “If you’re a businessperson, you have to cover the costs, whether it’s a tax you have to pay or another way to get to the same thing – a regulation that they force you to comply with. It hurts your opportunity to hire people. It hurts your chances to expand. It hurts all the things we think of as productive in the economy, and that’s a headwind to growth.”
Regulatory burdens aren’t just shouldered by businesses. They are also passed on to consumers. “[Regulations] amount to a massive stealth tax, paid by the American people, through lower pay and higher prices for the goods and services that we buy every day,” says Rep. August Pfluger (TX-11), Chairman of the U.S. House of Representatives' Republican Study Committee.
“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 Management Budget, points to the 1970s, 80s, and 90s as proof that an increase in competition and reduction in regulation led to “huge improvements in economic growth and social welfare because [before], we had innovations that were constrained by regulated activity.”
What’s more: 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 that creates strains on the productivity of business owners and their ability to run and grow their business.
“The Biden Administration’s regulations have imposed a paperwork burden that is equivalent to 360 million hours,” says Rep. Brandon Gill (TX-26). “If one person had to fill out all of that paperwork, it would take them an estimated 41,000 years.”
