When I ask employers in Maine what Washington needs to do to help them add jobs, they tell me this: reduce the cost and complexity of the federal regulations imposed on them. And this is not just a concern voiced by Maine businesses. Earlier this year, a poll of small business owners across the country found that the vast majority aren’t hiring new workers right now, and more than six in ten pointed to government regulations as the reason why.
This is consistent with findings by the National Federation of Independent Business that new regulations cost small businesses an average of $12,000 per employee annually. This excessive burden on our nation’s job creators helps explain the tepid job growth we have seen in recent years.
No business owner I know questions the legitimate role of regulation in protecting the health, safety, and well-being of employees and the public. But the public is not well-served by regulations that bury small businesses under a mountain of paperwork, driving up costs unnecessarily, and impeding growth and job creation. Proper regulation should be as efficient and simple as possible. At the very least, the benefits of a regulation should exceed its costs.
Unfortunately, the burden of federal regulations continues to grow. Right now, federal agencies are at work on nearly 2,500 new rules, at least 190 of which affect small businesses. Of these rules, 149 are major rules, costing more than $100 million each. These rules will go on top of a pile of regulations now measured in the millions of pages.
Year-by-year, this pile of pages gets ever deeper. In the 1970s, the Federal Register, the compilation of federal regulations, added some 450,000 pages. In the first decade of the 21st Century, more than 730,000 pages were added – a rate of 73,000 pages per year. And the pace continues to accelerate. On average since 2010, the federal government has added 80,000 pages to the Federal Register each year. This cannot continue.
We are now in the seventh year of an economic recovery that has produced such weak economic growth that most Americans still believe we are in a recession. The red-tape that is strangling our job creators is one of the reasons our economy has not rebounded as it did from prior recessions, and why millions of working-age Americans are not part of the labor force. If we want to get our economy back on track and rebuild the American workforce, Washington must get serious about streamlining and reforming our regulatory system.
In the Senate, the Homeland Security and Governmental Affairs Committee has jurisdiction over legislation to reform our regulatory system. As a past-Chairman and Ranking Member of that Committee, I know how difficult, but essential, it is to reach consensus on how to improve our regulatory system. Other than comprehensive tax refom, there are few actions Washington could take that would do more to strengthen our economy than to make sure that federal regulations achieve their intended goals without imposing unnecessary costs.
The Committee is currently putting together a bipartisan regulatory reform package that I am cosponsoring. This legislation contains common-sense provisions that help provide needed certainty, consistency, and accountability in the regulatory process.
These provisions include establishing a legislative commission to examine and recommend to Congress federal rules that should be consolidated, improved, or repealed. The bill would allow the President to require independent agencies, such as the Environmental Protection Agency, to consider the cost as well as the benefits of “major rules” – rules that cost the economy $100 million or more – before they adopt these rules, just as regular executive branch agencies must do. It would require federal agencies to notify the public three months before issuing new rules, to clearly state how they will measure the success or failure of new rules, and to prohibit them from using unofficial “guidance” documents to side-step these notification requirements.
In recent years, members of Congress from both parties and the President have offered regulatory reform proposals with little progress. In light of our persistently sluggish economy, I am hopeful that the Senate will move forward with regulatory reform this year. America’s job creators and hard-working people have waited long enough.