Small Business Owners Hail Regulation Review

In a sign of how complicated federal regulations can be, the FDA oversees frozen cheese pizzas but frozen pepperoni pizzas are under the USDA. From the CBS Evening News, Jan. 19, 2011.

CHICAGO - 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.

This week, President Obama ordered a top-to-bottom review of federal regulations.

CBS News correspondent Dean Reynolds reports many business owners say it's about time.

At Red Hen Bread near Chicago, owner Robert Picchietti says he's seen regulatory reform come and go. "The end result tends to be more government, more control, more regulations, more costs to the business owner," he says.

He runs three stores in the Chicago area providing bread for more than 400 restaurants. 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 USDA.

A different 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 said 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 Occupational Safety and Health Administration says the top is 140 degrees.

Could the president's new directive help? At Reliable Trucking in Lansing, Ill., president Kevin Lhotak operates 350 tractor trailers from eight cities, a $50 million business. He hopes so.

"These regulations can make or break a company," says Lhotak.

He argues that a lot of the rules are often redundant, inefficient and expensive.

"In the last seven years our company has doubled our safety department due to the changing regulations," he says.

And the stakes are high. Picchietti says, "I think there's a lot of money sitting out there and the reason people aren't spending it is they're just unsure of what's coming next."

What is coming next on the regulation highway?