Plan to Boost Small Business Outlined : Regulation: Clinton wants to cut red tape and tax rules, make pension plans more attractive.

President Clinton on Monday proposed simplifying federal regulations and tax rules to enable more small-businesses owners to enroll themselves and their employees in retirement plans.

“You may recognize these ideas, because we got them from you,” Clinton told the 1,790 delegates attending a White House Conference on Small Business.

Clinton earned applause and laughs when he promised delegates to cut 16,000 pages of federal regulations and had aides tote out 39 pounds of regulations bound in red ribbon. He read a passage that detailed federal rules on how to measure grits.

The laughs belied a more serious problem facing small businesses. Because of complicated federal pension plan regulations, only 15% of all small businesses nationwide provide pension plans, Clinton said.

Specifically, the President proposed that companies with 100 or fewer employees that guarantee contributions to an IRA-based pension be exempt from onerous anti-discrimination regulations.

He suggested elimination of the “family aggregation rule,” which for pension purposes lumps together the salaries of all family members employed in a family-owned business. The rule places a cap on income deductions, in effect limiting the pension-plan tax deduction that married couples or family members can take.

Clinton also proposed terminating a complex seven-part test used by the federal government to ensure that all workers in a company benefit from pension plans, not just “highly compensated employees” or executives.

Although the proposed modifications may have seemed arcane to some, they struck a chord with older business owners who have wrestled with the rules for years.

“I’m a Republican, but I stood up and applauded,” said conference delegate Charline Rambaud, owner of an Agoura medical billing company. “It means my husband and I can save more money for our retirement.”

Randy Neugebauer, a Lubbock, Tex., land developer sporting a cowboy hat like other members of the Texas delegation, said small businesses haven’t implemented pension plans because the fees paid to attorneys to start and monitor them eat up whatever profits they might earn.

“You’re better off doing something on your own,” he said, referring to investments in outside savings accounts.

The changes suggested by Clinton have been before Congress previously but were dropped in favor of more pressing business-related issues, said conference delegate Dena Tady Honig, owner of an employee benefits consulting service in the San Fernando Valley.

But members of Congress who spoke at the conference later in the day said they were unfamiliar with the changes proposed by Clinton. The President’s backing “would give them a lot of momentum, but it would not necessarily mean they would pass,” said Sen. Dale Bumpers (D-Ark.), the minority leader on the Senate Small Business Committee.

Similarly, Clinton seeks bipartisan support to sponsor a bill that would authorize the elimination of the 16,000 pages of regulations he displayed Monday, a White House official said.