Nov 10, 2015 - 11:30am

Not Elected, Not Listening: Washington's New Regulatory System Fails Businesses


Executive Director, Communications & Strategy

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Our nation’s policymakers rarely miss an opportunity to talk about the importance of small businesses. However, when it comes time to actually listen to small businesses and take into account their concerns - or even the concerns of the American public - federal rulemakers are quick to turn a blind eye and a deaf ear, a new report shows.

Compiled by the National Federation of Independent Business, the study shows that the federal government is increasingly shirking its legal responsibilities to collect and consider feedback from the business community and the public in general when proposing and finalizing new regulations, as required under the Administrative Procedures Act. In doing so, unelected officials are not only threatening the business community with onerous rules, researchers concluded, they’re also undermining the system of checks-and-balances on which our government was built.

“If the founders envisioned a sea of liberty with only modest islands of regulation, how is it that we are now swimming in federally mandated red-tape?” Karen Harned, executive director of the NFIB’s Small Business Legal Center, wrote in the report.

It’s a question that both the U.S. Chamber of Commerce has been asking for years, with the group calling for broad regulatory reforms that bring our country’s rulemaking process back in check and protect businesses and the public from overly burdensome regulations.

“It’s time to restore accountability, transparency, public participation, and efficiency to our regulatory system and our government, and to unleash the power of businesses large and small to create jobs and growth without unjustified, unnecessary, and overly burdensome rules,” U.S. Chamber President and CEO Tom Donohue said in an address to business leaders late last year. “This is what our government reform agenda is all about—and it begins by modernizing what has become a virtual fourth branch of the American government—the regulatory branch.”

In addition to publishing its report, the NFIB sent letters seeking an explanation from seven federal agencies that have subverted the formal rulemaking process in recent years, including the Internal Revenue Service, the Department of Labor, the National Labor Relations Board and the Equal Employment Opportunity Commission. In each case, the NFIB found that regulators had either failed to collect feedback from small business stakeholders or issued additional and onerous rules that were clearly never intended by Congress.

“We’ve identified a number of agencies that have engaged in this practice and as a matter of good government we think the small business community deserves an explanation,” Harned wrote.

In line with the NFIB’s report, the Chamber’s Donohue has repeatedly noted that the nation’s regulatory process simply cannot work properly without meaningful participation from citizens stakeholders and citizens. He added that the U.S. business community and the American public must be informed about pending regulatory decisions earlier in the process, allowing their comments to be heard and taken into consideration by federal agencies.

“The growth of the federal regulatory state is one of the most serious issues facing our economy, free enterprise, and our way of life,” Donohue wrote on Above the Fold earlier this month. “The best way to push back against it is to continue making progress on sound, bipartisan reforms that will make the system better.”

Only then, he added, can businesses expect to see “rules that really work, that are fair to all, that meet the test of common sense, and that are compatible with our principles of economic freedom and our strong desire for jobs and growth.”

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About the Author

About the Author

J.D. Harrison
Executive Director, Communications & Strategy

J.D. Harrison is the Executive Director for Strategic Communications at the U.S. Chamber of Commerce.