Wednesday, December 03, 2014WASHINGTON -- The president and CEO of the U.S. Chamber of Commerce, Thomas J. Donohue, Tuesday offered four principles of regulatory reform the federal government should embrace: accountability, ensuring greater transparency, allowing participation by stakeholders and guaranteeing a safe but swift permitting process.
He addressed the Joint Committee of the Environment, Technology & Regulatory Affairs Division of the U.S. Chamber.
Donohue emphasized he is not against regulations but how they are promulgated and enforced. In the remarks for delivery released though the chamber press office, the CEO said, “Businesses recognize the need for regulations. Many rules on the books should have been put there and ought to stay there. They help establish economic rules of the road. They help ensure workplace safety and protect public health. They provide needed standards and procedures on how to operate equipment, handle food properly and keep the environment clean.”
But all too often, he said, the intent of the regulations does not coincide with how they’re written and enforced. Hence the case Donohue put forward for reform.
“Our regulatory system is increasingly opaque and driven by political agendas,” Donohue said. “It lacks basic accountability. It employs flawed data and questionable science. It ignores congressional intent and too often prevents citizens from weighing in on proposed rules in any meaningful way.”
Citing Douglas Holtz-Eakin, a Republican and former director of the Congressional Budget Office, Donohue said the cost of complying with the regulations added since 2009, the year Barack Obama became president, has been $150 billion more a year. “Compliance costs now exceed $2 trillion a year,” he said.
Donohue allowed, “Much of that cost will prove necessary even after reform.” Moreover, “The business community and most Americans are willing to pay for sound and thorough regulatory safeguards if government agencies were more honest about the data and science they used, if they allowed it to be peer-reviewed and examined by others, if they accurately and transparently assessed benefits, if they did not overstep congressional intent.” (Donohue’s emphasis).
Such is not the case, he contends. “We have a government that has shifted into regulatory overdrive,” Donohue declared, “[with] some 4,000 new rules issued very year.”
Despite this volume of rules promulgated, “only a handful carry the greatest costs and regulatory impact,” the chamber president said. On Nov. 26, the Environmental Protection Agency released a rule to limit ozone emissions “which could cost the U.S. economy over 600,000 lost jobs annually,” he noted.
The chamber press office cited NERA Economic Consulting, based in London, as the source. At a standard of 65 parts per billion (ppb), the EPA rule “would cause 609,000 lost jobs annually from 2013 to 2037 at 65 ppb,” NERA says.
On Dec. 19, the EPA will issue its final rule for coal-fired power plans disposing of fly ash, Donohue noted, “which could put 65,000 to 315,000 Americans out of work.” The chamber press office cited a 2011 study by Veritas Economic Consulting, based in North Carolina.
Overhauling and reforming the regulatory system could “generate faster economic growth and create more jobs,” Donohue said, “while actually improving the health and safety protections Americans want and deserve.”
While Donohue did not provide specifics on how to effect the principles in his reforms, he called for:
Restoring Accountability
“Congress should impose a greater burden of proof on agencies to demonstrate that the costliest laws are truly needed and that they are pursuing the least costly alternatives to achieve their goal.”
He was critical of efforts to have the Federal Communications Commission ensure broadband net neutrality, saying “Such a move would discourage necessary investment in broadband networks and sock consumers with $17 billion in new federal, state and local fees tacked on to their monthly bills.”
Ensuring Transparency
Too often an interest group and a government agency sue a business that “settle in a sweetheart deal” because it’s cheaper to settle than fight. A federal judge signs off with “a result [that] key decisions about how and when to issue new regulations are made in secret, entirely outside the normal rulemaking process.”
Allowing Participation by Stakeholders
The GAO found that more than a third of “major regulations are issued without a public comment period,” Donohue said.
'Safe but swift' Permitting Process
Donohue distinguished between rule making and issuing permits. “The permitting process is often too slow and the rulemaking process often too fast,” he said. When the rules are made, “deadlines are tight and often unreasonable” with little opportunity for stakeholders to comment.
“In the permitting process, there are no hard deadlines for environmental reviews and legal challenges, allowing projects to be killed, delayed or litigated endlessly.”
Moreover, businesses that apply for permits all to often get no answer, leaving projects in limbo or dying on the vine. “They may not like it,” Donohue said, “but businesses can take ‘No’ for an answer on a permit. What we can’t tolerate is no answer at all.”
The choice between speed and safety is a false dichotomy. “We can have both and we need both,” he said.
The reforms Donohue proposes, he said, can achieve a regulatory system that create jobs and economic growth instead of the system in place that allows obstruction, delay and proposed projects that never come to fruition as “lawyers and permit grantors … line their own pockets.”
CLICK HERE to read the full transcript of Donohue’s remarks.
Pictured: Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, outlines proposals for regulatory reform.
Published by The Business Journal, Youngstown, Ohio.
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