Federal regulations should do their critical job of protecting public health, safety, and the environment while not unnecessarily hurting job creation and economic growth. This goal is achievable, but it requires a smarter and more modern regulatory process. And it is needed—the federal regulatory process hasn’t been reformed in any significant way in over 70 years.
Think about that—the last time Congress reformed what’s called the Administrative Procedure Act, the law that provides our regulatory framework, was when Harry Truman was president. Back then a gallon of gas cost 21 cents and the American economy was 10 percent of the size it is today.
We need 21st century regulatory policies that keep up with our 21st century economy. That’s why I introduced the Regulatory Accountability Act, a bipartisan bill that would modernize federal regulations, increase transparency, and give the public more of a voice in the process.
Business owners and farmers across the state tell me how regulations that come from behind closed doors in Washington hurt their bottom lines in Ohio.
One recent example I heard was at a small family-owned business in Alliance, Ohio called Whitacre Greer Brick. They said that one EPA regulation costs them nearly $1 million—equal to about 10 percent of their annual revenue. That’s extra money they just don’t have. That $1 million would be going back into their business, creating more jobs and driving better wages, if not for one compliance cost.
They’re not alone. Companies across Ohio are calling for changes to this process. Federal regulations have an important purpose, but they need to be reflective of modern business practices, and those affected by the decisions should be involved in the process.
The Regulatory Accountability Act achieves this in three common-sense ways.
First, it requires a cost-benefit analysis before implementing any new regulation. Every president since Ronald Reagan, Republican or Democrat, has agreed that regulatory agencies should do this. This bill would finally establish that idea as law so that no future president can unilaterally change it. It also requires federal agencies to adopt the most cost-effective regulation available or explain the rationale for choosing an alternative regulation if they feel it would have a greater benefit. This common-sense approach will lead to regulations that achieve the legislative goal without killing jobs or unduly burdening small businesses.
Second, this bill increases transparency throughout the regulatory process. Before proposing any major rule, meaning a regulation that costs the economy more than $100 million a year, agencies would have to issue a notice and invite the public to submit relevant information about its potential impact. This allows Ohioans to have input in the decision-making process for potential new regulations that will affect them. This increased transparency, along with requiring federal agencies to use the best scientific and economic data available, will help make better, smarter regulations that are also less burdensome on job creators.
Third, this bill establishes retrospective reviews of federal regulations. Agencies will have to regularly assess whether rules are meeting their publicly-stated objectives to ensure that regulations are reflective of our changing economy.
This bipartisan bill makes common-sense changes Ohioans have been calling for. When I talk to folks back home, including recent visits to General Tool in Cincinnati, Dynalab in Reynoldsburg, Rice Energy in Belmont County, and Haessly Hardwood Lumber in Marietta, or countless others, business owners throughout the state say unnecessary, outdated regulations hurt their revenue and stifle job growth. They want to be able to hire more people and invest more in their businesses, and this bill will help them to do that.
Small businesses are the bedrock of the American economy, and the federal government should support them, not hold them back. This bill makes sense, and it will help get the economy going for folks back in Ohio trying to build their businesses and live the American dream.
Rob Portman represents Ohio in the senate and is a guest columnist.