Senate Introduced Bill Will Make Federal Regulations Smarter & More Effective

by Sean Hackbarth, Contributing Author: Americans complain about overregulation. As rule after rule has piled up over the decades, they have good reason to complain.

But here’s an interesting observation: Regulations written by the Obama administration operated under something like a power law. The biggest regulatory costs came from a few regulations, as this American Action Forum chart shows.

Another way of looking at this is a chart from an important report, Taming the Administration State, by the U.S. Chamber's Environment, Technology & Regulatory Affairs Division.

“The regulatory world is top-heavy, where a majority of costs and benefits are concentrated in three or four measures,” explained AAF’s Sam Bakins.

Regulations with massive burdens include the FCC’s Open Internet Order that converted the internet into a publicly utility, the (stayed) Waters of the United States rule that would give EPA authority over how land is used over large portions of the country, and the (also stayed) Clean Power Plan that would wipe out affordable coal-fueled power plants.

Businesses - especially small businesses - have had to cope with these costly rules and know full well they hold back investment, job creation, and economic growth.

If we focus on the costliest rules, regulators can limit their detrimental effects, make them more effective at achieving their intended goals, or even reevaluate their intended purpose.

To the rescue is the Regulatory Accountability Act (RAA). Sens. Rob Portman (R-Ohio) and Heidi Heitkamp (D-N.D.) introduced the bipartisan bill in the Senate that would make the first major changes to the federal regulatory process in seven decades.

The RAA is based on three principles for regulatory reform William Kovacs, U.S. Chamber Senior Vice President, Environment, Technology & Regulatory Affairs, laid out earlier this year:

• Accountability. Federal agencies need to show that the costliest rules are truly needed and are written to use the least costly option available to achieve their objective.
• Transparency. Agencies must be open about why and how they make key decisions to regulate, and avoid making those decisions in secret under pressure from special interest groups, entirely outside of the normal rulemaking process.
• Participation. Agencies should be required to inform the public of pending regulatory decisions on high-impact rules early in the process, share their data and economic models, and allow those who will be affected adequate time for public input.

The RAA would focus federal agency efforts on proposed regulations that would have the biggest effects on the economy. The federal government would still have the ability to write necessary regulations. The RAA would only require additional effort on the most-expensive ones in order for them to achieve their intended goals at the lowest cost to our economy.

“Our bipartisan bill would make federal regulations smarter and more effective for everyone impacted by them, support job growth, create certainty, and provide an important check and balance on the president no matter who is in charge,” said Sen. Heitkamp. “Can you imagine if we still used telecommunications systems from World War II? They might get the job done, but they would be slow, potentially faulty, and incredibly inefficient. The same goes for the current 70-year old law which still governs the way federal agencies propose and establish regulations.”

“This legislation would bring our outdated federal regulatory process into the 21st Century by requiring agencies to use the best scientific and economic data available, strengthening checks and balances, and giving the public a voice in the process,” Sen. Portman added.

Business groups support the RAA. Neil Bradley, U.S. Chamber Senior Vice President and Chief Policy Officer, said in a statement:

The rules governing the federal regulatory system were written in the Truman administration, with few updates since then. Now, under the Trump administration, it’s past time to modernize the process. The Regulatory Accountability Act would increase scrutiny of the most expensive rules that cut across industries and sectors, requiring greater transparency and agency accountability. We encourage all Senators to support this bipartisan reform legislation that can encourage business expansion, spur job creation, and ultimately help grow the American economy.After the House passed the RAA earlier this year, business groups urged the Senate to do the same. “The RAA stands for good governance and getting rules right by bringing transparency, accountability, and integrity to the rulemaking process at federal agencies,” the letter stated. “With the passage of RAA, Congress would be restoring the checks granted to it by the Constitution over a federal regulatory bureaucracy that is opaque, unaccountable, and at times overreaching in its exercise of authority.”

President Trump and the Congress have done quite a bit in the first 100 days of the new administration to lower regulatory burdens on businesses. By passing the RAA into law and improving how federal regulations are made, it would be a victory for a more competitive economy.

Watch Sens. Portman's and Heidkamp’s press conference where they introduced the RAA.
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Sean Hackbarth is a policy advocate and Senior Editor, Digital Content, at U.S Chamber of Commerce. He twitters at @seanhackbarth and is a contributing author at the ARRA News Service.

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