Hearing of the House Judiciary Committee - H.R. 3010, the Regulatory Accountability Act of 2011

Statement

Chairman Smith: The American people urgently need jobs that only economic growth can give. Standing in the way of growth and job creation is a wall of federal regulation.

As of 2008, federal regulations cost our economy $1.75 trillion each year. The Obama Administration seeks to add billions more with a host of new major regulations. Its 2011 regulatory agenda calls for over 200 new major rules, each of which will affect the economy by $100 million or more each year.

And the Administration has proposed four times the number of major regulations than the previous administration, over a similar period of time.

New regulatory burdens and uncertainty about the economy have helped to keep trillions of dollars of private sector capital on the sidelines. Companies cannot safely invest if they cannot tell whether tomorrow's regulations will make their investments unprofitable. Without new investment, we cannot expect new jobs.

The Administrative Procedure Act (APA) is out of date and encourages regulatory overreach and excessive regulatory costs. Enacted in 1946, it places only a handful of light restrictions on the federal rulemaking process. Congress wrote it long before anyone imagined the reach and expense of the modern regulatory state.

The APA does not require agencies to identify the costs of their regulations before they impose them. It does not require agencies to consider reasonable, lower-cost alternatives. The APA does not even require agencies to rely on the best reasonably obtainable evidence.

While the APA does require agencies to give notice of proposed rulemaking and receive public comment on its proposals, too often that is an after-the-fact exercise. Frequently agencies pre-determine the outcome of rulemakings and notice-and-comment serves only to paper over the record.

The Regulatory Accountability Act fixes this problem by bringing the APA up-to-date. Under its provisions, agencies are required to assess the costs and benefits of regulatory alternatives. Unless interests of public health, safety or welfare require otherwise, agencies must adopt the least-cost alternative that achieves the regulatory objectives Congress has established.

The Regulatory Accountability Act contains common-sense reforms that have bipartisan support in both the House and the Senate. In large part, that is because so many of its provisions are modeled on the terms of executive orders that Presidents Reagan, Clinton, Bush and Obama have issued to compensate for the APA's weaknesses.

Over the past three decades, these bipartisan executive orders have proved that the principles of the Regulatory Accountability Act work. But the executive orders are not permanent, are not judicially enforceable and do not bind independent agencies.

Congress should pass the Regulatory Accountability Act to make cost-justification and other common-sense practices permanent and enforceable fixtures of the regulatory landscape. If America's economy is to grow, produce jobs and remain globally competitive, Washington must change.

The Obama Administration itself has made concessions to this view. Executive Order 13563 acknowledges that new regulations "must take into account benefits and costs." And in September 2011, the Administration said "No" to a new, multi-billion regulation -- at least for now. That regulation was the Environmental Protection Agency's new Ozone National Ambient Air Quality Standards.

Under the Regulatory Accountability Act, principles of Executive Order 13563 and its predecessors would at last become binding law. Sound decisions that meet statutory objectives while they respect the economy's needs would be the order of the day, not the rare occurrence.

American jobs, American growth and American competitiveness would all be the better for it.

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