September 10, 2014 / 5:46 PM / 6 years ago

U.S. manufacturers cry foul over cost of federal regulations

WASHINGTON (Reuters) - U.S. manufacturers cried foul on Wednesday over the “burden” of complying with federal regulations, which they say cost them more than $2 trillion in 2012 that could have been reinvested in their businesses.

A study commissioned by the National Association of Manufacturers (NAM) found the average U.S. manufacturer forks out about $19,564 per employee each year to comply with regulations, nearly twice the cost incurred by the average U.S. company.

Small manufacturers with fewer than 50 employees pay $35,671 per employee to comply with the rules, the report said, more than three times the cost to the average U.S. company.

“If you’re a small business, you’re getting a double whammy from the cost of regulation,” economist W. Mark Crain, one of the study’s authors, told reporters during a conference call.

The report is the latest salvo in a long-running battle over the burden of federal regulations as business groups attempt to persuade Congress and regulators to loosen the rules.

NAM President and Chief Executive Jay Timmons said major new rules, such as a recent ozone standard from the Environmental Protection Agency, would make the overall burden even heavier. He said the new EPA rule would be the most expensive in U.S. history.

In June, the Supreme Court rejected an attempt by industry groups, including NAM, to block the EPA’s rules, which aim to curb greenhouse emissions. It did, however, exempt some smaller facilities from the regulations.

“These and other regulations mean an even larger burden on our country’s small manufacturers,” Timmons said.

The trade group, which represents about 12,000 manufacturers across all 50 states, said regulations are needed, but that they need to be streamlined and made less complicated and costly.

Nearly one in nine manufacturers surveyed for the report cited federal regulations as the biggest challenge to their business.

“If we are to succeed in creating a more competitive economy, we must reform our regulatory system,” Timmons said .

Reporting by Elvina Nawaguna; Editing by Peter Galloway

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