Sensible, balanced federal regulation can promote important public benefits. But as President Obama has noted, excessive regulation can place "unreasonable burdens on business -- burdens that have stifled innovation and have had a chilling effect on growth and jobs."
Employers in the states we represent frequently echo this concern. Many say they would like to expand and add jobs, but the regulatory environment is too uncertain and costly. Overregulation tops the list of problems faced by small businesses, according to a recent Gallup survey of business owners.
The White House is asking federal agencies to eliminate inefficient old rules. That's a step in the right direction. But in addition to this regulatory housecleaning, the nation needs structural reform of how the most expensive new rules are written.
The Regulatory Accountability Act, which we introduced, would modernize the blueprint of the regulatory system for the first time since it was enacted in 1946. It would build economic reality checks into the process that government regulators use to issue rules. It would set the stage for lower-cost rules, greater transparency, and a more stable regulatory environment for job creation and investment.
The House of Representatives passed the legislation on a strong bipartisan vote last December. Now the Senate must take up this critical reform.
Drawing on executive orders by presidents of both parties, including President Obama, over the past three decades, our legislation requires agencies to evaluate the costs and benefits of proposed new regulations. They must consider the potential impact on jobs and the economy, and choose the least burdensome approach that accomplishes the intended policy goals.
To hold regulators accountable, the bill would permit judicial review of an agency's analysis of costs and benefits of major rules -- the 40 to 80 costliest regulations out of the nearly 4,000 that are issued annually. Courts would ensure that agencies do not rely on irrational assumptions or treat cost-benefit analysis as an afterthought, as too often occurs today.
Our bill opens the regulatory process to greater sunlight at nearly every stage. It invites early public participation in major rules and requires agencies to disclose the data they use. It would also ensure that agencies use sound scientific and technical data to justify new rules, consistent with President Obama's directive that agencies should apply the "best available science" to craft regulations.
The bill would require agencies to follow a more thorough, evidence-based approach in developing rules that will cost more than $1 billion a year. Such high-impact rules are relatively rare -- the White House has identified seven that are in development -- but the cost of getting them wrong is extremely high.
This legislation would require agencies to give affected parties access to a hearing to test the factual foundation that underlies high-impact rules. Forcing agencies to do more work on the front end to get new rules right will produce less costly and more stable regulatory outcomes.
Some critics who are committed to the status quo object that this bill asks too much of regulators. But federal regulatory agencies have more than 280,000 employees and an annual budget of $54.8 billion. Is it really too much to ask that major new rules should be shown to do more good than harm?
Our reform bill draws on familiar 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. The bill would make these criteria more clear, permanent, enforceable, and applicable to independent agencies that are now exempt.
Our nation's economy is still struggling, and more than 21 million Americans are unemployed or underemployed. Now is the time to build a more job-friendly regulatory system.
The Regulatory Accountability Act would do just that. We look forward to working with our Senate colleagues to move legislation that will make regulations cheaper and better for American employers, workers, and consumers.
U.S. Sens. Rob Portman (R., Ohio) and Mark Pryor (D., Ark.) are sponsors of the bipartisan Regulatory Accountability Act.