Bipartisan Bill Reduces Red Tape on Job Creators

A bipartisan, bicameral group in Congress has unveiled a plan to what its proponents said would significantly reform the federal regulatory process and reduce unnecessary burdens on job creators.

House Judiciary Committee Chairman Lamar Smith (R-Texas), Courts, Commercial and Administrative Law Subcommittee Chairman Howard Coble (R-N.C.) and Representative Collin Peterson (D-Minn.) were joined by Senators Rob Portman (R-Ohio) and Mark Pryor (D-Ark.) in introducing the Regulatory Accountability Act of 2011.

The bill reforms the current rulemaking process to lower the costs and improve the quality of new regulations.

This bipartisan, bicameral effort is the first of its kind in more than a decade to reform and minimize regulations that stifle economic growth.

Chairman Smith: “The current regulatory system has become a barrier to economic growth and job creation.  Federal regulations cost our economy $1.75 trillion each year. Employers are rightly concerned about the costs these regulations will impose on their businesses. So they stop hiring, stop spending and start saving for a bill from Big Brother.  But rather than burdening businesses with more regulations, we need to free up employers so they can create jobs for American workers. The Regulatory Accountability Act does just that. It places permanent restrictions on regulatory agencies and restores accountability by requiring openness and transparency in the regulatory process. This is a bipartisan, bicameral bill that both parties, both houses of Congress and the President should support.”

Representative Peterson: “While it is difficult to enact a new law, it’s even harder to get a regulation written correctly. In many cases, interest groups try to use regulation to interpret the law in their best interest, instead of following the intent of the law. By bringing transparency and accountability to the regulatory process, the American people will be allowed to have a voice in these policy decisions.”

For decades, presidents of both parties have issued executive orders to produce more sensible, less burdensome regulations, according to the House Judiciary Committee.  This bill makes the principles of those bipartisan directives permanent, enforceable, and applicable to all regulatory agencies, including independent agencies. The Act also requires agencies to tailor new regulations to impose the least cost necessary to achieve policy goals set out by Congress. Finally, the bill requires agencies to hold formal hearings to test the assumptions and evidence on which the costliest new rules are based. 

This legislation builds basic cost-benefit analysis principles into each step of the rulemaking process — proposed rule, final rule, and (for major rules) judicial review, the Judiciary Committee explained. These principles are drawn from the longstanding, bipartisan Executive Order framework created by the Reagan and Clinton Administrations and reaffirmed by President Obama in January 2011. Those principles would be made permanent, enforceable and applicable to independent agencies. In the Smith-Peterson bill, compliance with these new requirements would be subject to judicial review for all rules.

Parties affected by billion-dollar rules will have access to a fair and open forum to question the accuracy of the views, evidence, and assumptions underlying the agency’s proposal, according to a summary issued by Sen. Portman.

The hearing would focus on (1) whether there is a lower-cost alternative that would achieve the policy goals set out by Congress (or a need that justifies an higher cost than otherwise necessary); (2) whether the agency’s evidence is backed by sound scientific, technical and economic data, consistent with the Information Quality Act; (3) any issues that the agency believes would advance the process. Parties affected by major rules ($100M+) would also have access to hearings, unless the agency concludes that the hearing would not advance the process or would unreasonably delay the rulemaking.

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