Capitol Hill

Reshaping the regulatory process

I recently attended an event with a member of Congress in Washington, D.C., where an attendee asked the congressman: "What are you hearing about most from your constituents these days?" The congressman quickly responded: "Regulations! Every business-person I talk to expresses frustration about the burden of new government regulations and how they affect the ability to grow."

In recent years, numerous new regulations have been issued by the Department of Labor, Occupational Health and Safety Administration, National Labor Relations Board and other federal agencies that have significant effects on employers. The Small Business Administration (SBA) estimates the total annual cost of compliance with all federal regulations to be $1.75 trillion.

Focus on reform

The regulatory challenges employers face are likely to grow even further during the years to come. For example, regulations needed to implement the employer-related provisions of the 2010 Affordable Care Act are expected to be voluminous and complex.

Given the increasing amount of government regulation affecting employers, NRCA, at the direction of its Government Relations Committee, is making the enactment of regulatory reform legislation a top priority.

NRCA's objective is to work with other similarly affected business groups to reform the process under which federal agencies develop regulations to provide more opportunities for input from small and midsized businesses. Ultimately, a more open, transparent process should enable the business community to work with federal agencies to develop regulations that can achieve desired public policy goals while minimizing adverse effects on employers and the economy.

Making progress

During the past year, some progress was made toward advancing regulatory reform in Congress.

In late 2011, the House of Representatives approved several reform measures NRCA supports, including the Regulatory Flexibility Improvements Act (H.R. 527), which is designed to strengthen the existing law that requires federal agencies to consider the effect proposed regulations have on small businesses in the regulatory development process.

H.R. 527 gives SBA's Office of Advocacy, which NRCA has worked with numerous times to combat burdensome regulations, additional authority to expand opportunities for input from small businesses as regulations are being considered. The bill also would improve the accuracy of the cost-benefit analysis used by federal agencies during the regulatory development process.

Also in late 2011, the House approved the Regulatory Accountability Act (H.R. 3010), another NRCA-supported initiative designed to reform the regulatory process. H.R. 3010 modernizes the Administrative Procedures Act, the primary statute governing how agencies develop regulations, which has not been updated in 65 years.

Among other reforms, H.R. 3010 would hold agencies more accountable by providing for on-the-record administrative hearings as regulations are written with the opportunity for interested parties to subject critical evidence to cross-examination. The bill also contains provisions requiring agencies to ensure regulatory decisions are science-based and to choose the lowest-cost alternatives to meet statutory objectives.

More recently, in July, the House approved the Red Tape Reduction and Small Business

Job Creation Act (H.R. 4078)—yet another NRCA-supported reform initiative. H.R. 4078 includes provisions designed to streamline the federal permitting process that currently delays many construction projects. It also would impose transparency to prevent agencies from circumventing established rulemaking requirements by using a "sue and settle" process in which a party (usually an environmental group) sues the government and the agency then develops a regulation to settle the lawsuit with little or no public input.

H.R. 4078 also includes an amendment by former NRCA President Rep. Reid Ribble (R-Wis.) to prohibit major new "midnight regulations" from being proposed or issued during the period between a presidential election and a new president's inauguration.

Unfortunately, the Senate has not considered these regulatory reform bills. However, these initiatives were approved with significant bipartisan support in the House, and similar legislation introduced in the Senate has been co-sponsored by Senators from both parties.

I hope the work and efforts during the past two years have begun to lay the foundation for serious bipartisan cooperation regarding regulatory reform legislation when the new Congress convenes in 2013. NRCA will continue working to achieve enactment of regulatory reform in 2013 and beyond.

Duane L. Musser is NRCA's vice president of government relations.


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