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Public Statements

Regulatory Accountability Act of 2011

Floor Speech

By:
Date:
Location: Washington, DC

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Mr. SMITH of Texas. Mr. Chairman, I yield myself such time as I may consume.

Employers across America face an avalanche of unnecessary Federal regulatory costs.

Federal regulations cost our economy $1.7 trillion every year, over $15,000 for each household, according to the Small Business Administration. Yet the Obama administration seeks to add billions more to that cost.

The administration's record-setting issuance of major regulations is particularly troubling. By its own admission, the administration's 2011 regulatory agenda contains 200 regulations that typically will affect the economy by $100 million or more every year.

For employers, the people who create jobs and pay taxes, the impact of these costly regulations is clear. Government regulation has become a barrier to economic growth and job creation. Faced with huge, new, regulatory burdens and uncertainties about what will come next, employers slow down hiring, stop investing, and wait for a bill from the Obama administration.

What enables the administration to issue so many new regulations with so little regard for their costs is the outdated Administrative Procedure Act. Enacted in 1946, the APA's minimal limitations on rulemaking have hardly changed in decades and do nothing to control costs.

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

The Regulatory Accountability Act has bipartisan support in both the House and the Senate, including from a number of House Democrats who have cosponsored the bill. In large part, this is because its provisions are modeled on the Executive orders that presidents Reagan, Clinton, Bush, and Obama have issued to compensate for the APA's weaknesses.

Opponents of the act claim that it requires the benefits of all new regulations to exceed their costs. They argue that as a result the act will prevent Federal agencies from issuing important new public health, safety, and welfare regulations. This is false.

The Regulatory Accountability Act only requires agencies to adopt the lowest cost regulatory alternative that achieves the agency's statutory objectives. This assures that agencies will achieve all of those objectives but with much lower costs.

Opponents also assert that the act's new procedural requirements will halt all Federal rulemaking, but the act primarily codifies existing Executive order principles and practices under which agencies have been able to issue regulations for years.

The act's few additional requirements all are streamlined. They will improve the quality and lower the cost of regulations, but they will not unduly delay them. The act increases the transparency of the rulemaking process with more advance notices of proposed rulemaking, more opportunities for public comment, and more opportunities for public hearings. This will lessen the influence of all special interests.

The Regulatory Accountability Act provides the greatest opportunity yet for Republicans and Democrats to join together and lower the job-killing cost of regulations. And it allows costs to be lowered while it assures that all of Congress' regulatory objectives are, in fact, obtained.

The bill also provides a clear opportunity for the votes of Democrats in Congress to match President Obama's words on regulatory reform. In his State of the Union address, the President said that ``to reduce barriers to growth and investment, when we find rules that put an unnecessary burden on businesses, we will fix them.''

In Executive Order 13563, the President said that ``our regulatory system must promote economic growth, innovation, competitiveness, and job creation; must allow for public participation and an open exchange of ideas; must identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends; and must take into account benefits and costs.''

The President was right. And the Regulatory Accountability Act does all those things.

I urge all of my colleagues to support the Regulatory Accountability Act.

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Mr. SMITH of Texas. Mr. Chairman, I yield myself 30 seconds.

Here is another poll that I'm going to cite that will support what this administration's own Small Business Administration has found about the cost of these regulations. This is an article by the Gallup Poll. The article is dated October 24, 2011, just a few weeks ago. Here's the headline on the article: ``Government Regulations at Top of Small-Business Owners' Problem List. One in three small business owners are worried about going out of business.'' The article was written by Dennis Jacobe, chief economist.

Here's the first line and the finding of the Gallup Poll: ``Small-business owners in the United States are most likely to say complying with government regulations, 22 percent, is the most important problem facing them today; followed by consumer confidence in the economy, 15 percent; and lack of consumer demand, 12 percent.''

Mr. Chairman, arguably, the administration is responsible for every one of these problems because of the administration's policies.

I will now yield 5 minutes to the gentleman from North Carolina (Mr. Coble), who is the chairman of the Courts, Commercial and Administrative Law Subcommittee of the Judiciary Committee.

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Mr. SMITH of Texas. Mr. Chairman, I yield myself 1 minute.

Unfortunately, we hear a lot of words that are really irrelevant to the bill that we are considering here today. Once again, let me repeat that the Regulatory Accountability Act only requires agencies to adopt the least-cost regulatory alternative that achieves the agency's statutory objectives. It therefore assures that in all instances agencies will achieve those objectives, whether to protect public health, safety, or welfare or to satisfy some other statutory purpose.

The RAA's key contribution is to require that, once agencies have identified means to achieve their statutory objectives, they will simply choose the means that impose the lowest cost. I don't know how anyone could object to that. This creates a positive cycle in which agencies and regulated entities compete to identify innovative, least-cost means to achieve statutory objectives while they simultaneously produce the most benefits.

I reserve the balance of my time.

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Mr. SMITH of Texas. Mr. Chairman, I yield myself 3 minutes.

I realize some people want to close their eyes and close their ears so they don't see or hear the facts. There's an old adage that none are so blind as those who don't want to see the wisdom of the facts.

Mr. Chairman, despite the sound and fury that we've heard, let me repeat a fact; and the fact I want to repeat is this: that the bill always allows agencies to meet statutory objectives. If, for example, only one rulemaking alternative meets statutory objectives, the agency may adopt that alternative, even if its cost exceeds its benefits.

The bill generally requires agencies to adopt the least costly alternative that meets statutory objectives if more than one alternative meets those objectives. Agencies may adopt more costly alternatives to protect public health, safety and welfare, including workers' safety, however, if the benefits of the more costly alternative justify their costs, and the agency is acting to protect the interest of public health, safety or welfare that are within the scope of the statutory provisions that authorize the rulemaking.

As a result, many workforce safety, Clean Air Act, Clean Water Act and other public health, safety and welfare regulations on the books still could have been adopted under the bill, even if they were not the least costly alternatives.

The difference is agencies would have done a better job of assessing whether those regulations really were the best ones to adopt and would have had a greater incentive to look harder for the alternatives that achieved the most benefits for the lesser costs.

Further, the bill does not invite courts to immerse themselves in the weeds of whether agencies have satisfied every jot and tittle of how best to perform a cost-benefit analysis. Instead, it asks the courts to enforce the bill's least-cost standard, and allows the courts to defer to agency cost-benefit analyses that comply with guidelines from the Office of Information and Regulatory Affairs.

As the DC circuit most recently demonstrated in Business Round Table v. SEC, the courts know well how to enforce requirements that agencies weigh the economic impacts of regulation without immersing themselves in endless arguments over every fine point of economic analysis. So the bill will actually decrease litigation.

Mr. Chairman, this bill is really just a litmus test for all Members of the House as to, not whether they want to implement regulations or not, but whether they want to do so in the least costly manner possible. Again, I don't see how anyone can rationally oppose the objective of this bill.

Mr. Chairman, I reserve the balance of my time.

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Mr. SMITH of Texas. Mr. Chairman, I yield myself the balance of my time.

Our troubled economy forces many Americans to tighten their financial belts as they enter this holiday season. It is especially frustrating that the typical American worked more than 2 months, about 77 days, this year to pay for the cost of government regulations alone.

For the unemployed, the news is even worse. Official unemployment has hovered around 9 percent all year. When the unemployed and underemployed and those who no longer seek employment are counted, the effective unemployment rate reaches almost 16 percent.

But rather than add much-needed jobs to the economy, the Obama administration has only added job-killing regulations that burden businesses and stifle economic growth.

The administration counted 410 new major rules in its regulatory agendas for 2010 and 2011. Mr. Chairman, that is four times the number of major rules than during the first 2 years of the previous administration. In addition, the White House has reported to Congress that, for most new major rules issued in 2010, the government failed to analyze both the costs and the benefits. Many more major regulations are now in the works, and there is no assurance that the administration will adequately consider their costs and benefits either.

The Regulatory Accountability Act provides the cure for this epidemic of regulatory costs. It is a bipartisan, bicameral piece of legislation that requires agencies to do a better job of determining whether new regulations are really needed; and when regulations are necessary, it requires agencies to find the lowest cost alternative to achieve its goals. In other words, you can still achieve the goals but in the least costly way possible.

The Regulatory Accountability Act will not stop Federal agencies from issuing needed regulations, but it will stop them from imposing unjustified regulatory costs. In conclusion, I urge my colleagues to support the bill, and I look forward to its final passage.

With that, I yield to the ranking member of the Judiciary Committee.

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Mr. SMITH of Texas. Mr. Chairman, reclaiming my time, I will add that Allie Halataei has also served us well on the Judiciary Committee for 6 years. She has been on my personal staff for 2 additional years. She has also been a deputy chief of staff for the full Judiciary Committee in addition to having served previously on the Immigration Subcommittee.

We value all of her expertise, her talents, her dedication, and her conscientiousness. All of those wonderful attributes are going to be missed, but we do wish her well in her next position.

Mr. Chairman, I yield back the balance of my time.

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Mr. SMITH of Texas. Mr. Chairman, I yield myself the balance of my time.

This amendment, regrettably, seeks special consideration in rulemaking for a handful of groups; but the bill seeks to declare no favorites and gives no special policy treatment to any group. Instead, the bill creates an even-handed procedural reform that benefits all groups with greater transparency, accountability, and public participation in rulemaking.

Perhaps the amendment is motivated by a concern that regulatory outcomes not shortchange the needs of seniors, veterans, and lower income families; but the bill already assures that these groups and all others will obtain the protection they need.

The bill always allows agencies to achieve the regulatory objectives that Congress has set. Generally, if an agency can reach the goal with a lower cost
regulation, though, of course it should; but if a costlier regulation is needed to protect the public health, safety, or welfare, including protecting seniors, veterans, and low-income families, the agency can adopt that regulation.

The agency just needs to show that the benefits justify the additional costs and the interests protected fall within the scope of the statutory provision that authorizes the rule.

In this reasonable, balanced way, the bill guarantees statutory objectives will be met while we at least achieve real regulatory cost control. That is a win/win solution for everyone in every group.

The Federal Government does not always need to do something more costly for special groups. It needs to always do something more cost-effective for everyone. I urge my colleagues to oppose this amendment, and I yield back the balance of my time.

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Mr. SMITH of Texas. Mr. Chairman, I yield myself the balance of my time.

One problem in rulemaking is the practice of agencies to negotiate regulations behind closed doors with a few interested parties, then propose and adopt a predetermined rule.

To help cure this problem, the bill requires advanced notice of major and high-impact rules that agencies may propose. These are the rules that cost $100 million or $1 billion or more respectively.

The advance notice requirement ensures that those who bear the costs of these high-cost regulations have an opportunity to shape agency decisions before they become entrenched in predetermined rulemaking proposals. It also dramatically increases the transparency of the most important agency rulemakings; and, of course, if emergency rules were needed, advance notice may be waived.

The amendment, on the other hand, makes advance notice discretionary, not mandatory, with the agencies. That guarantees that advance notice will rarely be used. It eliminates much needed transparency, and it only helps those who negotiate rules behind closed doors, then ram deals through the rulemaking process, ignoring public comment.

The amendment may arise from a concern that advance notice not unduly slow down emergency rules. If that is the case, there is no need for concern. Like the existing Administrative Procedure Act, the bill allows agencies to issue emergency rules before they complete ordinary procedure.

I urge my colleagues to oppose the amendment. It hurts the bill. It hurts the process.

I yield back the balance of my time.

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Mr. SMITH of Texas. The amendment carves out of the bill essential sectors or regulation and guidance. These include all rules and guidance documents on food safety, workplace safety, consumer product safety, clean water, and clean air. In many cases, these are precisely the agency actions that impose the most cost without producing enough benefits. A good example is the Environmental Protection Agency's recent proposal to control mercury emissions from coal- and oil-fired power plants. EPA estimated that the rule would cost $11 billion annually to achieve; at most, just $6 million in total mercury reduction benefits. That's a cost-to-benefit ratio of almost 1,200:1.

Proponents of regulation have nothing to fear from the bill's provisions to prevent excessively costly rules like this. The bill always allows agencies to achieve the statutory objectives Congress has set. Those objectives include protection of food, workplace, and consumer safety, as well as of clean air and clean water. All the bill requires is that agencies consider the cost and benefits of regulatory alternatives and, wherever possible, adopt the least-cost regulation that achieves that goal.

If a costlier rule's benefits justify its additional cost and the rule is needed to protect public health, safety, and welfare, the agency may adopt it. The agency just needs to show that the public health, safety, and welfare interest it seeks to protect are within the scope of the statutory provision that authorizes the regulation itself.

That is balanced reform that protects public health, safety, and welfare and the American economy and the American taxpayers and the small business owners of America.

I urge my colleagues to oppose the amendment, and I yield back the balance of my time.

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Mr. SMITH of Texas. Mr. Chairman, I yield myself such time as I may consume.

The amendment creates a special carve-out from the legislation's requirements for regulations and guidance of the Nuclear Regulatory Commission. Regulation of the nuclear power industry, however, should go through the same rulemaking process as other regulations. In this way, all interested parties will have the best opportunity to test their assumptions about nuclear power and nuclear waste.

Perhaps the amendment is motivated by a concern that the legislation could prevent the Nuclear Regulatory Commission from issuing emergency rules and guidance or rules that adequately protect public safety. That concern, however, is unfounded. The legislation preserves agencies' ability to make interim-final rules for ``good cause.'' This exception certainly would cover emergency rules from the Commission.

The bill also allows agencies to adopt alternatives to least-cost regulations if interests of public health, safety, or welfare require costlier rules. Only two conditions need to be satisfied: First, the costlier rule must produce benefits that justify the additional cost; second, the benefits must serve public health, safety, or welfare interests within the scope of the statutory provision that authorizes the regulation.

Surely the Nuclear Regulatory Commission and any other agency can adequately protect public health, safety, and welfare within those conditions.

I urge my colleagues to oppose the amendment, and I yield back the balance of my time.

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Mr. SMITH of Texas. Mr. Chairman, I yield myself the balance of my time.

This amendment seeks to shield the Department of Homeland Security from the bill's urgently needed rulemaking reforms. There is no good reason to provide that shield.

For example, take the Department's rules to extend compliance deadlines for States to issue secure drivers' licenses under the Real ID Act. Ten years after 9/11 hijackers used fraudulent licenses to board airplanes used to murder 3,000 innocent Americans, the Department of Homeland Security continues to extend the deadline. Clearly, the Department of Homeland Security should not be exempt from the bill's provisions.

I urge my colleagues to oppose the amendment, and I yield back the balance of my time.

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