Opinion

Washington red tape hurts businesses and families

Wonder why America is suffering through the most disappointing economic recovery in half a century?

One major reason: suffocating red tape out of Washington that discourages businesses from hiring new workers and making new investments to create more jobs.

The rate of new federal regulation is growing at a staggering rate. Four of the five highest regulatory page counts in the Federal Register have occurred under President Obama. They include the Affordable Care Act, Dodd-Frank, extreme energy, workplace and environmental mandates as well as executive directives on federal overtime laws and wages.

Wayne Crews, author of a book that tracks federal regulations, estimates America’s overall cost each year of complying with all this red tape is $1.9 trillion - about equal to the size of Canada’s economy. He documents how every American household pays a hidden regulation tax of nearly $15,000 a year in higher prices and lower wages.

We can all agree that balanced, common-sense standards are needed to protect public health and safety, preserve the environment and prevent fraud. But this is out-of-control. Our local businesses and those throughout the country tell me repeatedly how damaging all these new Washington regulations have become.

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When developing new rules, rarely do Washington agencies conduct an analysis in advance to determine its costs and the benefits. Of the 37,000 new regulations over the past decade, only three in every 1,000 were subject to a complete analysis of their effects on the U.S. economy, job creators and families.

For a nation seeking a smarter, more efficient government, that is just shameful. America's regulatory system should be designed to achieve the greatest good at the least cost. Both Republicans and Democrats should be able to agree on that principle.

Smart, effective regulations should seek to reduce rates of illness, mortality, and pollution -- but not by reducing economic growth, job creation and the incomes of hardworking Americans. Safety and security must not come at the cost of stagnation, unemployment and lower incomes that rob from the middle class.

We need a better way - a 21st Century way to sift through regulations, both proposed and existing, to accurately identify their true costs and find the least costly, the least intrusive way to achieve the goals on which we agree.

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Senator Dan Coats of Indiana and I have introduced the Sound Regulation Act to improve the way Washington develops new regulation. The main principle: better analysis up-front means less harmful red tape.

The Sound Regulation Act expands accurate cost-benefit analysis beyond executive agencies to include all independent agencies as well, including the SEC, Federal Reserve and FCC.

It closes the loopholes that allow some federal agencies like the EPA to skirt the requirement for objective economic analysis.

It ends ‘agency bias” where the agency proposing a new rule rubber-stamps the analysis it conducts principally in secret. It requires more public transparency and input into the analysis before a new regulation is adopted, and lays out the guidelines for identifying alternatives that achieve the result at less cost. Often Washington regulations are later proven to be costly and counterproductive. Why not identify poor regulations and halt them before they do damage?

Finally, the Sound Regulation Act requires agencies to regularly review existing regulations to determine their success and costs in the real world. It’s time to repeal regulations whose costs far exceed their benefits.

With millions of Americans looking for work and too many college graduates manning cash registers, ‘staying the course’ on Washington red tape simply isn’t acceptable.

Congressman Kevin Brady is the Chairman of the Joint Economic Committee and a senior member of the House Ways & Means Committee.