Published September 2011
Federal regulation profoundly affects business in the United States. Unfortunately, while regulation can be essential, during this time of economic challenges it has become all too apparent that specific regulations are often counterproductive and far too costly, with a detrimental impact on employment and job creation. The challenge is to have only regulations that are necessary and cost-effective.
The driving idea behind this report is simple and timely: By improving the regulatory process, the resulting regulations will better meet the needs of the American people in a way that does not impose unnecessary costs. Accordingly, building upon prior Business Roundtable reports and analysis, Achieving Smarter Regulation reaffirms time-tested recommendations and focuses on particular proposals that are most relevant today.
This report first outlines the major challenges posed by federal regulatory policy. Too often, regulations are too expensive and too rigid, hurting both innovation and competitiveness. The overall regulatory environment, especially in light of many regulations’ heavy compliance burdens, too often fails to produce the certainty that business needs to invest and create jobs.
Second, this report lists key principles that should guide a well-functioning regulatory process. For example, by encouraging early public engagement and ensuring that agencies use quality information and engage in objective, common sense analysis, a smarter regulatory process can maximize the efficacy of regulations and minimize their costs. Meaningful oversight by the Office of Management and Budget is essential.
Third, this report explains that the regulatory process is a shared responsibility among all branches of government and the public. To achieve essential reform, all stakeholders must work together to implement smarter regulatory policy.
Fourth, this report explains particular concerns about the current regulatory process. For instance, agencies do not always conduct or adhere to cost-benefit analysis. Nor do they always use the best available data and scientific methodologies. Courts are sometimes overly deferential to agencies in certain contexts. And in recent years, problems with the federal permitting process have also come to the fore.
Finally, this report sets forth four specific reforms to meet those challenges including: stronger requirements for objective analysis, including for rules issued by “independent” agencies; more and earlier agency disclosure of the costs of proposed regulations; updates to the Administrative Procedure Act to require more rigor in the promulgation of the key subset of major rules that impose the greatest economic burden; and streamlining the permitting process.
By implementing these reforms in legislation and with a spirit of cooperation, the regulatory process can be made more cost-effective and of higher quality for the American people and can accomplish necessary objectives in a better, more transparent and more efficient way than some of the highly problematic regulations of recent years.