Unwinding the regulations

Published 9:16 pm Saturday, December 17, 2011

Perhaps you have experienced a similar situation: walking into your living room to find your spouse sitting on the floor, the vacuum cleaner flipped upside down, the bottom cover removed and screws strewn about. Around your spouse is a collection of small devices — a pencil, a screwdriver, scissors, a paper clip — clearly the tools of choice in unearthing whatever they are looking for.

Older vacuum cleaners in particular have an affinity for catching string in the rotating brush so that it becomes so tightly wound, causing the whole thing to stop working. The tightly wrapped string has the strength of steel. No tool can clear it in one easy swoop, testing the patience of even the most even-keeled individuals. It takes intention, precision, and a whole lot of persistence to unwind it.

Regulatory red tape in Washington is a little bit like that. It has become so tightly wound around American businesses that it keeps business owners and entrepreneurs from focusing on the operation of their businesses. And its steel-like strength leaves many business owners feeling frustrated or helpless.

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Not all regulations are bad, nor are all regulations completely inconsistent with free-market principles. It is important for the federal government to set parameters for the basic protection of Americans. This is true in areas of fraud protection, prescription drug safety, preservation of natural resources, among others.

But lack of accountability in the regulation process has allowed the red tape to choke seeds of innovation and competition that are vital to business success. Small business owners, manufacturers, farmers and property owners all are affected.

There has been a 23-percent drop in the rate of new business creation since 2007, resulting in as many as 1.8 million fewer jobs for Americans. Why? The National Federation of Independent Business believes the increasing role of government in the lives of businesses is partly to blame. A 2010 report by the Small Business Administration found that American businesses paid, on average, $8,086 per employee to comply with federal regulations.

Businesses are forced to comply with new standards at an increasing rate, causing some plants to shut down because of the cost of the new rules. Just a couple of months ago, Dominion Power announced it was closing its Chesapeake plant and laying off employees due to excessive costs to upgrade the plant to meet new federal environmental standards.

Whether it’s the Department of Energy reviewing urinal efficiency, the federal government’s lawsuit against Boeing for moving into right-to-work state South Carolina, or the phase-out of non-toxic incandescent light bulbs in favor of compact fluorescent bulbs, federal heavy-handedness affects companies of all sizes.

With these regulations come inconsistent and unpredictable changes. The result is uncertainty for business owners, stalling job creation for Americans. Without consistency, businesses cannot safely invest, because they cannot tell whether new regulations will make their investments unprofitable. Without new investment, we cannot expect new jobs for our economy.

At a time of record high unemployment, bureaucrats are focused on the wrong problems. Instead of focusing on creating regulations, we need to be focused on creating prosperity. The federal government was not intended to be a barrier to economic growth. I believe we must closely examine federal regulations to identify and address those that hurt economic growth.

Regulation reform alone will not rebound our economy. But regulatory reform would put us on a positive track forward. I have joined with my colleagues in the House recently to pass several key reform bills.

4Regulations from the Executive In Need of Scrutiny Act: The REINS Act requires that Congress take an up-or-down vote on every new major rule (i.e., those having an economic effect of at least $100 million) before it could be enforced on businesses and the American people.

4Regulatory Flexibility Improvements Act: In 1980, Congress passed the Regulatory Flexibility Act, which mandated that federal agencies examine the impact of proposed rules on small businesses. However, the law did not require that they choose the least burdensome choice. The Regulatory Flexibility Improvements Act forces agencies to consider how their actions affect small businesses and other small entities.

4Regulatory Accountability Act: In 1946, the Administrative Procedure Act was enacted to restrict the federal rulemaking process. But the APA is out of date, encourages regulatory overreach, and needs reform. The Regulatory Accountability Act brings the APA up to date, requiring that agencies 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.

These bills improve the regulatory process. At the same time, we have to remove the regulatory burden that already exists for American businesses. To that end, I have also supported several pieces of legislation that repeal or improve onerous existing regulations.

Addressing federal regulations is no simple task. The red tape has become so tightly wound that it will take intention and precision to unwind it. But our goals are clear: create a predictable economic environment for businesses to invest and grow, encourage job growth, increase competitiveness, and create more accountability in Washington.

Each of these improvements brings us one step closer to those goals.

Congressman J. Randy Forbes represents Virginia’s Fourth District in the U.S. House of Representatives. Contact him at (202) 225–6365.