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July 16, 2012

Q&A on Regulatory Reform and Job Creation

Q:    How significant is the burden of federal regulations on economic activity?
A:    According to a recent Gallup survey, small-business owners in the United States are most likely to say that complying with government regulations is the biggest problem facing them today.  Recently the Small Business Administration estimated the federal regulatory burden has reached $1.75 trillion a year.  That’s just the cost of existing regulations.  Uncertainty about what new regulations could be issued tomorrow also makes it difficult to expand and hire more workers.  Since 70 percent of new jobs are created by small business, reducing federal red tape and providing a more transparent, accountable regulatory process should be a top priority for creating an environment to help private-sector employers create jobs.

Q:    What can be done to reduce the burden federal regulations put on job creation?
A:    Washington needs to stay focused on job-generating reforms, including relief from the negative impact of the government’s heavy hand.

In July, I introduced legislation to try to stop a litigation process known as “sue-and-settle” from being used to quash meaningful public participation in the rulemaking process of federal regulators.  This regulatory abuse happens when federal agencies and special interest groups enter into consent decrees or settlement agreements governing the creation of regulations.  Agreements are reached almost entirely outside the public process.  Abuse is particularly prevalent when career and political employees at federal agencies share the agenda of the special interest group suing the agency.  The lawsuit becomes an opportunity to implement their shared goals, and the agency is inoculated from accountability by the existence of a court order.  The result is a degrading of the transparency and accountability measures built into the federal rulemaking process.  Sue-and-settle litigation makes traditional notice-and-comment periods a meaningless formality.  My Sunshine for Regulatory Decrees and Settlements Act works to establish transparency, safe-guard public notice and comment, and make consent decrees subject to modification.  The legislation is a direct response to the use of these practices that manipulate and distort America’s system of lawmaking and judicial review.

I’m also a cosponsor of the Unfunded Mandates Accountability Act, which would require federal agencies to assess the potential specific effects of new regulations on job creation or job loss.  This reform would require consideration of market-based and non-government alternatives to regulations.  It would make federal agencies choose the least burdensome regulatory option that achieves the policy goal set out by Congress.  It also would extend the Unfunded Mandate Reform Act of 1995 to independent federal agencies outside of the cabinet-level departments of the federal government.  It would permit federal courts to review an agency’s economic impact analysis under the 1995 law.

Separately, the House of Representatives already has passed several needed reforms to the regulatory process.  This includes the Regulations from the Executive In Need of Scrutiny Act – or REINS Act – which I’ve cosponsored in the Senate.  The legislation would require the most costly federal regulations to be passed by Congress and signed into law by the President before they take effect so the American people have someone to hold accountable for the government regulations that increasingly affect their lives.  It’s time for the Senate to do the same and for the President to roll up his sleeves, as well.

I hear it from Iowans at the grass roots, and surveys and studies deliver the same message:  The government needs to remove barriers to job creation rather than erect new ones.