Published: February 11, 2011
America’s CEOs applaud President Obama’s initiative to streamline the federal regulatory apparatus, review all existing federal regulation and avoid new regulations that impede innovation, diminish U.S. competitiveness in the global economy and restrain job creation and economic expansion – while providing little or no benefit to Americans.
Business Roundtable urges swift action by both the Administration and Congress to relieve U.S. companies of burdensome regulations that threaten economic recovery and throttle job creation. Restoring American prosperity must be the first order of business for the U.S. government and all of its agencies. A more economically secure and prosperous nation will have greater capacity to bear the cost – and enjoy the benefits – of prudent and necessary regulation.
More than two years after a sequence of crises in the U.S. housing and financial sectors plunged the economy into a deep and profoundly disruptive recession, American families continue to struggle with the painful after-effects of persistently high unemployment and weak job creation.
Against this backdrop of fragile recovery, a government-wide review of regulation must begin with an assessment of the cumulative effect of the total regulatory burden on the macro economy. Traditional cost/benefit analyses do not capture the dynamic impact of multiple new regulations on domestic industries already confronted with weak consumer demand, global competition and rapidly evolving structural changes in the world economy.
Taken individually, a regulation – or even several – may appear to be cost-effective and manageable. However, the cumulative impact of literally dozens of new major regulatory requirements facing all sectors of the economy over the next several years is something entirely different. That is why an evaluation of the total regulatory burden is essential to understanding the magnitude of the problem U.S. businesses face. The costs of regulation stifle productivity, wages and economic growth. By diverting capital away from more productive uses, poorly designed regulations undermine job retention and creation.
Any evaluation of proposed or existing regulation should begin by asking: what are the likely effects on job retention and growth, investment and U.S. economic competitiveness? While these are the right questions in any economic climate, they assume greater significance in the current environment.
The next question should be: is there a smarter, faster, more flexible and less burdensome way of accomplishing the objective? If the underlying statute lacks the necessary flexibility, changes or alternatives should be proposed so that it does.
Finally, reforms to streamline the regulatory process must address the uncertainty and delay imposed by the current system that stymies capital investment in the United States. The overly cumbersome and time-consuming federal permitting process for construction projects and major capital investments by regulated industries, often involving uncoordinated overlapping jurisdiction of disparate agencies, must be rationalized. Permitting delays inadvertently disadvantage U.S. companies, discourage domestic investment and slow the pace of U.S. job creation.
In addition to a broad evaluation of the total regulatory burden, and an appraisal of more flexible alternatives, Business Roundtable recommends the following concrete steps to ensure that President Obama’s Executive Order is effectively implemented:
Successfully streamlining government regulation is not a one-time, simple endeavor. It will require constant vigilance, Presidential direction, engagement by Congress and hard work over many years. It will also require an active partnership with the business community that desperately needs the rules to work in a way that protects the public and allows companies to compete and win in the global economy.