Senators Rob Portman (R-OH), Mark Warner (D-VA), and Susan Collins (R-ME) today introduced bipartisan legislation to require independent agencies to analyze the costs and benefits of new regulations and tailor new rules to minimize unnecessary burdens on the economy. The bill adopts a key recommendation of the President's Jobs Council.
"Independent agencies exercise vast power over major sectors our economy -- from telecom, to agriculture, to financial services -- but they are exempt from commonsense requirements including cost-benefit analysis of major regulations to ensure they do more good than harm," Portman said. "This bill would close the loophole for independent agencies by authorizing the president to bring them within the same regulatory review framework that applies to other agencies. This is a bipartisan, consensus reform with broad support, and it will promote a more stable regulatory environment for economic growth and job creation"
"It is important to strike the right balance between protecting vital public safeguards and imposing costly regulations," Warner said. "However, we all agree that basic cost-benefit principles should apply to all regulators. This bipartisan legislation will help to ensure that all agencies only advance major regulations with a firm understanding about their impact on the economy."
"No business owner I know questions the legitimate role of limited government in protecting our health and safety. Too often, however, our small businesses are buried under a mountain of paperwork that drives up costs, prevents the hiring of workers, and impedes economic growth," Collins said. "Business owners are reluctant to create jobs today when they're going to need to pay more tomorrow to comply with onerous new regulations. I have asked employers in my state what it would take to help them add jobs. No matter their business or the size of their work force, they tell me that Washington must stop imposing crushing new regulations. Right now, independent agencies are not required to examine the costs and benefits of their regulations before they adopt them. This common sense bill would change that."
For 30 years, presidents of both parties have required agencies to scrutinize the costs and benefits of major new regulations, but this process has always exempted independent agencies, such as the Securities and Exchange Commission, the Commodity Futures Trading Commission, the National Labor Relations Board, and the Federal Communications Commission, among others. The Portman-Warner bill would fill that gap by authorizing the president to bring independent agencies into the same analysis and review process that governs other regulators.
The need for this reform is obvious. According to government records, out of the 17 major final rules issued by independent agencies in 2011, not one was based on a complete cost-benefit analysis. The same was true in 2010 -- 17 major rules, zero with a complete cost-benefit analysis. In 2009, the figure was 13 and zero, and in 2008, it was 11 and one. Based on Government Accountability Office data, it is estimated that nearly 200 regulations issued by independent agencies between 1996 and 2011 had an impact of $100 million or more on the economy, but were exempt from the cost-benefit framework that applies to other agencies.
There is broad support for this reform proposal. Most recently, in January 2012, the President's Jobs Council recommended in its annual report, "Congress should require [independent agencies] to conduct cost-benefit analysis for economically significant regulations. A requirement that [independent agencies] must conduct regulatory impact analyses . . .would prompt [independent agencies] to perform better analyses and to issue better and smarter regulations."
This bill makes good on that recommendation.