Making Better Regulations a Reality
Consumers, workers, and all other Americans have a vital stake in improving the federal regulatory process. Good regulations--and there are many--enhance the quality of life for all people. Bad regulations complicate our lives, while frustrating and confusing our citizens. As we learn too often after the fact, there are many bad regulations as well--such as most mandatory asbestos removal, the ozone rule, and regulations setting Corporate Average Fuel Economy standards.
All regulations impose costs, including higher prices, fewer choices, greater hassles, and slower action. Experts in government and the research community tell us the costs are substantial.
That's why businesses large and small wholeheartedly support S. 746, "The Regulatory Improvement Act of 1999." Sponsored by Senators Fred Thompson (R-Tennessee) and Carl Levin (D-Michigan) and supported by the Clinton Administration, S. 746 is good-government legislation that will help improve the nation's regulatory system by making it more understandable, sensible, and accountable.
- Understandable regulations will enjoy greater public acceptance.
- Sensible regulations will stand on a foundation of careful, thorough analysis.
- Accountable regulators will have greater confidence that they are addressing the most pressing issues sooner and faster, and that their work is likely to withstand challenge.
Professor Thomas Hopkins of the Rochester Institute of Technology testified before Congress in April that total spending on regulatory compliance has climbed to just over $700 billion for 1999. That figure represents roughly 9 percent of our U.S. gross domestic product--$7,000 per family every year. Our nation simply cannot afford to pay such a price without evidence of equal or greater benefits.
Policy experts at leading universities like Harvard and Duke tell us that an improved regulatory system would actually save more lives while reducing the costs. Dr. John Graham, director of the respected Harvard Center for Risk Analysis, has shown that we could save 60,000 additional lives each year at no additional cost if we simply shifted current resources from wasteful to cost-effective programs. If we can do that, common sense dictates that we should.
Environmental experts at research organizations have reinforced Dr. Graham's message. Dr. Robert Repetto of the World Resources Institute has said, "we're not getting as much as we should for our expenditures on environmental protection." And Dr. Richard Morgenstern, a senior fellow at Resources for the Future who served as EPA's acting assistant administrator for policy from 1990 to 1993, has said the kinds of economic tools included in S. 746 will improve regulations by tightening their focus, reducing costs, and enhancing benefits.
S. 746 takes a "what works" approach to regulatory improvement. It builds upon what already exists, drawing on such things as President Clinton's 1995 regulatory improvement Executive Order 12866, Vice President Gore's "Reinventing Government" initiative, and recent laws such as the Unfunded Mandates Act and the Small Business Regulatory Enforcement Fairness Act.
S. 746 adds important new tools that we believe will help regulators do a better job, including:
- Comparative risk and benefit/cost analyses, which will improve priority-setting and help allocate resources to the most important regulatory issues. Experts believe that such tools will save more lives at lower cost.
- Science-based risk assessments, which will result in better, more effective regulations. Dr. Milton Russell, another former EPA assistant administrator for policy, has said that well-executed risk assessments will document the reasons for regulatory decisions and enable new rules to move quickly to implementation.
- Independent peer review, which will ensure that regulatory decisions will stand upon a foundation of the best science and the best cost-benefit analyses. Dr. Bruce Alberts, president of the National Academy of Sciences, said that peer review will ensure that regulators use the best science to make good policy.
By opening the rulemaking process to more public insight and information, S. 746 will improve the quality of the risk assessments and regulatory analyses that agencies conduct.
Taken together, the rules emerging from the regulatory process envisioned by S. 746 will enjoy broader public understanding and greater acceptance by those they affect. Ultimately, that will mean less litigation and faster implementation.
The Levin-Thompson proposal will equip regulators, lawmakers, and the public with good science, solid economic and risk analyses, and a better sense of the consequences of their actions.
The debate surrounding S. 746 is not about whether to regulate, for we must regulate when it is in the nation's interest. Rather, the debate is about how to regulate better so that the public's interest is best served.
D. Lynn Johnson is chairman of Alliance USA, an ad hoc coalition of more than 1,000 companies of all sizes, trade groups, and business associations. Coalition members represent Fortune 500 companies, corner hardware stores, units of government, educational and other nonprofit institutions, and individuals. For more information, visit the Alliance's Web site at http://www.allianceusa.org.