Feb 13, 2017 - 11:00am

The State of American Business: Fixing Our Broken Regulatory Process


Senior Vice President, Environment, Technology & Regulatory Affairs

When U.S. Chamber President and CEO Tom Donohue laid out the U.S. Chamber’s 2017 Growth Agenda in his State of American Business speech on January 11, there was a reason that the top item on the list was regulatory relief and reform. As Donohue pointed out:

An unelected fourth branch of government—the regulatory branch—is holding our small business sector back while imposing unnecessary costs on larger companies too.

Our country’s businesses simply can’t grow and create jobs if they are constantly being burdened by increasingly complex and expensive regulations.

The existing regulatory process has generally worked well in managing routine matters. But unfortunately the system is not working for the most complex and high-cost regulations. Think Waters of the United States, in which the Environmental Protection Agency claims jurisdiction over most of the landmass of the country; Net Neutrality regulations which convert the Internet into a public utility; or constantly revising ambient air quality regulations which determine where new facilities can be built. These kinds of regulations have the most profound effect on American business owners and consumers. The U.S. Chamber believes that Congress needs to re-examine how these critical rules are being written since they govern huge swaths of the U.S. economy. 

To really understand the problem, we have to take a look back.

Article I of the U.S. Constitution gives Congress “all legislative powers.” Under the checks and balances built into the Constitution, our Founders made it difficult to get a piece of legislation through both chambers, reconciled through a joint committee, and then sent to the president’s desk for signature. For Congress to be a real check on federal agency overreach it needs to reclaim its full legislative authority by establishing clear standards for agency rulemaking and court review of the regulations. These standards are necessary to ensure agencies implement the intent of Congress and the American people, not the intent of unelected agency heads.

To help straighten out the process, we have laid out some bipartisan principles that should guide any regulatory reform.

  1. Accountability. Federal agencies need to show that the costliest rules are truly needed and are written to use the least costly option available to achieve their objective.
  2. Transparency. Agencies must be open about why and how they make key decisions to regulate, and avoid making those decisions in secret under pressure from special interest groups, entirely outside of the normal rulemaking process.
  3. Participation. Agencies should be required to inform the public of pending regulatory decisions on high-impact rules early in the process, share their data and economic models, and allow those who will be affected adequate time for public input.

With support from the White House, we finally have a real chance in 2017 to achieve these reforms and make a difference in how major rules are created in this country. The Regulatory Accountability Act of 2017 (H.R. 5) passed the House of Representatives on January 11 by a bipartisan vote of 238 – 183 after a huge show of support from the business community.

The RAA, which only increases scrutiny on the most costly rules, is the first attempt to substantively amend the Administrative Procedure Act, the regulatory guidebook for federal agencies, since its enactment in 1946. In a letter of support from 616 business groups sent to Senate leadership, the legislation was explained:

The RAA builds on established principles of fair regulatory process and review that have been embodied in bipartisan executive orders dating to at least the Clinton administration. The RAA stands for good governance and getting rules right by bringing transparency, accountability, and integrity to the rulemaking process at federal agencies. With the passage of RAA, Congress would be restoring the checks granted to it by the Constitution over a federal regulatory bureaucracy that is opaque, unaccountable, and at times overreaching in its exercise of authority.

The RAA is just one opportunity that Congress and the Trump administration have to reform the regulatory process and roll back growth-killing rules. We look forward to working with lawmakers and the president to get our rules right.

NOTE: On Thursday, February 16 at 2:00pm, Eastern Time, William Kovacs participated in a Facebook Live chat on the state of American Regulations. Watch it below or on the U.S. Chamber's Facebook page.

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About the Author

About the Author

William Kovacs headshot
Senior Vice President, Environment, Technology & Regulatory Affairs

Bill Kovacs is the Senior Vice President for the Environment, Technology & Regulatory Affairs at the U.S. Chamber of Commerce.