One Small Step …

May 26, 2011

The results are in on the Obama administration’s four-month review designed to identify existing regulations “that are out-of-date, unnecessary, excessively burdensome, or in conflict with other rules.”

They certainly had a lot to choose from. There are about 180,000 regulations on the books costing Americans $1.7 trillion a year in compliance costs. Many are necessary; some aren’t. Although we have yet to review all the details, it appears the administration is making some commonsense recommendations that will save businesses some time, money, headaches, and resources. This is progress. 

This is also not nearly enough. Congress required periodic regulatory look-backs from federal agencies when it enacted Section 610 of the Regulatory Flexibility Act in 1980. And while we applaud the administration for doing what the law requires, they appear to have sidestepped the fundamental issues of cost and burden that have Republicans and Democrats alike clamoring for long-term regulatory reform.

Federal agencies complied with the “look back” provisions of the presidential executive order that initiated this regulatory review, but, in their infinite wisdom, exempted the huge flow of regulations in the pipeline generated by the health care and financial reform laws, as well as the large number of major rules generated by the Environmental Protection Agency (EPA) over the past two years. And therein lies the rub. Business have, by and large, learned to deal with existing regulations that have accumulated over time, 95% of which we agree with. The costs have been factored in.

But there is an enormous onslaught of new regulations on the way that will cost hundreds of billions of dollars, hamper our recovery, undermine our competitiveness, and cost jobs. They are being promulgated under the same flawed system that generated the regulations the administration just found necessary to review. And the “look back” plans do not appear to fix this problem.

The plan put forth by EPA is a good example. There have been roughly twenty regulations proposed or finalized over the past two years at EPA that the Chamber has weighed in on in one way or another, ranging from greenhouse gases to boiler emissions standards to numeric nutrient criteria. The costs to industry in these twenty rulemakings are steep, and in virtually each case EPA has not adequately performed statutorily-required analyses of job impacts, economic impacts, small business impacts, and other burdens. Yet EPA’s plan identifies only two of the twenty – the lead paint rule and vehicle greenhouse gas regulations – and in both cases still fails to address the fundamental complaints made by industry.

When Neil Armstrong landed on the moon nearly 42 years ago, he said, “This is one small step for man, one giant leap for mankind.” This review process represents the “one small step”; the “giant leap” that will fundamentally reform our deeply flawed regulatory system, pull it into the 21st century, and fashion it into an effective tool to ensure public health and safety and advance America’s economy and competitiveness has yet to come. And it better come soon.

What we need is a plan to make our flawed regulatory system smarter, less intrusive, and more accountable. Any such plan must require greater congressional oversight of rules that have a major economic impact; cost-benefit analyses and science reviews conducted entirely by independent third parties to ensure quality data and to remove politics from the equation; and  greater judicial access for stakeholders so they can enforce transparency, check bureaucratic power, and hold governmental decision makers accountable.

This isn’t about partisan politics, but about good government. A commonsense regulatory system that protects our citizens from health and safety threats while spurring economic growth, jobs, and competitiveness is the “giant leap” we must take for American success in the 21st century.

Fifty years ago, President Kennedy challenged the nation to put a man on the moon and return him safely to earth by the end of the decade. Surely we can come together as nation to achieve a more modest, but important, goal—a regulatory system that works for consumers, businesses, our economy, and American jobs.


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