By Senators Rob Portman and Mark Pryor
President Barack Obama, in his State of the Union address, talked about the need for "smart regulations." "There's no question," the president said, "that some regulations are outdated, unnecessary or too costly."
Employers in the states we represent echo that concern. Many say they would like to expand and add jobs, but the regulatory environment has become too uncertain and costly. Over-regulation now tops the list of "most important problems" faced by small businesses, according to a recent Gallup survey of business owners.
To address this, the White House last year asked federal agencies to "look back" and eliminate inefficient old rules. We strongly support this regulatory housecleaning, required by law since 1981, and hope that the initiative will produce tangible results.
But it is equally important to look ahead -- toward structural reform of how the most expensive new rules are written. The Regulatory Accountability Act, which we introduced along with Sen. Susan Collins (R-Maine), would set the stage for lower-cost rules, greater transparency and a more stable regulatory environment for job creation and investment.
First, drawing on executive orders by presidents of both parties over three decades, our legislation requires agencies to evaluate the costs and benefits of proposed regulations; consider the potential effect on jobs and the economy and choose the least burdensome approach that accomplishes the intended policy goals.
These provisions reinforce the White House's instruction to federal agencies to "minimize regulatory costs," and the president's January 2011 executive order, which urged agencies to "tailor regulations to impose the least burden on society."
To hold regulators accountable, the bill would permit a judicial check on an agency's cost-benefits analysis of major rules -- the 40 to 80 costliest regulations out of the nearly 4,000 issued annually. This review would be deferential, but the courts would ensure that agencies do not rely on irrational assumptions or treat cost-benefit analysis as a mere afterthought -- as too often occurs today.
Second, the bill opens the regulatory process to greater transparency at virtually every stage. It invites early public participation on major rules, requires agencies to disclose the data they use and cuts back on the misuse of guidance documents that are often written with little or no public input.
It also would ensure that agencies use sound scientific and technical data to justify new rules, in keeping with the president's directive that agencies should use the "best available science" to craft regulations.
Third, the bill would require agencies to follow a more thorough, evidence-based approach in crafting rules that will very likely cost more than $1 billion annually. These high-impact rules are relatively rare -- the White House recently identified seven in development today -- but the cost of getting them wrong is steep.
That's why this legislation would give stakeholders access to an agency hearing to test the key facts underlying these mega-rules. Agencies may have to do more work on the front end to get new rules right. But it will produce less costly and more stable regulatory outcomes.
Some critics have said this bill asks too much of regulators. These complaints are nothing new: 60 years ago, critics fretted that the Administrative Procedure Act would "severely cramp the style of government regulation" and would amount to "sabotage of the administrative process." Today, 166,000 pages of federal regulations later, the administrative state thrives.
With more than 280,000 federal employees at regulatory agencies, and an annual budget of $54.8 billion for those regulators, is it too much to ask that major new rules should be shown to do more good than harm?
The reality is that our reform bill draws on basic principles and tools in the rule-writing process and puts them to more effective use. Most of its analytical requirements already appear in various presidential directives. This bill would make those criteria more clear, permanent, enforceable and applicable to independent agencies that are exempt today.
With our nation's economy still struggling, and more than 21 million Americans unemployed or underemployed, now is the time to build a more job-friendly regulatory system. This bipartisan blueprint would do just that. The House already has passed a companion bill, and we look forward to working with our Senate colleagues to move legislation that can make regulations cheaper and better for all U.S. employers, workers and consumers.
Sens. Rob Portman (R-Ohio) and Mark Pryor (D-Ark.) serve on the Homeland Security and Governmental Affairs Committee. They are sponsors, with Sen. Susan Collins (R-Maine), of the Regulatory Accountability Act, a plan to update the Administrative Procedure Act.