Business Roundtable is an association of chief executive officers of leading U.S. companies working to promote a thriving economy and expanded opportunity for all Americans through sound public policy.
Adopt a Smarter Approach to Regulation
A nation’s regulatory system is one of the most telling indicators of its business environment.
Business Roundtable supports a smarter, more modern approach to regulation that meets regulatory goals while also promoting innovation, economic growth and job creation.
To make the U.S. regulatory system smarter, Business Roundtable believes that the government should improve the transparency and accountability of the regulatory process.
Learn about making the regulatory system smarter:
Business Roundtable Recommendations
Thorough cost-benefit analyses ensure that costs are justified and not overly burdensome on the business community or a damper on overall economic activity. Importantly, analyses should also account for the deterrent effect that costly regulations play in discouraging domestic investment. Careful review of regulatory and non-regulatory alternatives can ensure that agencies only regulate when the benefits of regulation justify the costs and that agencies adopt the least costly regulatory alternatives that meet the objectives of the underlying statute. Read more about the importance of cost-benefit analysis in crafting smart regulation in the new Business Roundtable primer.
A more open, science-based regulatory system will result in more effective regulations that will help spur business investment and contribute to economic growth. Agencies should be required to adopt rules only based on the best available scientific, technical or economic information available. And, in accordance with standard scientific and academic practice, agencies should publish data and models used in their analyses to provide an informed public with the ability to replicate the agency’s work.
The use of cost-benefit analyses to objectively evaluate proposed major rules has been a key part of the regulatory process for decades. However, so-called independent agencies have been exempt from the requirement to perform cost-benefit analyses. Objective, science-based cost-benefit analyses should underpin rulemaking across the government, including those independent agencies.
The costs of regulations that have accumulated over time represent a genuine problem for our economy, as well as for individual companies and other regulated parties. Likewise, out-of-date rules – and unnecessary rules – can have important impacts. It is all too rare that agencies ask whether the original problem a regulation was issued to address has been solved or could be addressed more cost-effectively. Retrospective review of certain existing regulations can help assess whether they are working as intended and, if not, provide an opportunity for improvement.
Currently, the public only receives notice of a proposed rulemaking after the agency’s process is well underway. At that point, it may be too late for interested parties who are experts on the issue to provide meaningful input to the agencies. Giving the public earlier notice of the problem an agency is trying to solve will allow for those with the greatest understanding of the issues, and the potentially affected activities, to provide agencies with the benefit of that knowledge when agencies can still readily make optimal use of it.
One responsibility of the judicial branch is to ensure that the executive branch stays within the bounds of its statutory authority and acts rationally. But courts, in recent years, have been too willing to defer to agencies’ interpretations of these statutes – and, even more so, to agencies’ interpretations of their own rules. Courts have also shied away from taking a hard look at agencies’ explanations for their actions. Courts can and should make these judgments more independently.