Regulatory reform necessary for economic growth

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Unfortunately, even the most successful fiscal compromise is no match for the long-term recuperative impact of substantive economic growth on our nation’s budget and deficit issues.

No partisan divide exists when it comes to the question of whether lawmakers should pursue policy that facilitates growth. And one of the surest paths to facilitating growth – and encouraging the stability that investors and job creators need to build that growth – is to reform our arcane and inefficient regulatory system.

Inefficient, redundant and excessive regulations have had a pronounced destabilizing effect on job growth and recovery. The system is grossly outdated, and it is laden with too many regulations that were put in place and long ago forgotten.
 
Despite this, a tidal wave of new rules are being advanced.  Since Election Day alone, Washington has issued over 800 new rules – that is over 8 new regulations daily.
 
Unfortunately, many of these proposed new regulations aren’t fully thought through and poorly structured. According to a recent George Washington University and Washington University analysis, in 2012 there were 283,615 full-time government employees dedicated to drafting and enforcing regulations, while fewer than 50 employees at the Office of Management and Budget were responsible for reviewing the new regulatory mandates to ensure they are justified and accurate prior to implementation.
 
It should not surprise anyone, then, that employers large and small are choosing not to invest, expand and hire because of the uncertainty surrounding the current regulatory system.

Additionally, NFIB’s January Small Business Economic Trends report shows red tape to be the second most important issue facing small business owners today; while a recent NAM NFIB Poll found that two-thirds of respondents say economic uncertainty in the market makes it hard for them to grow and hire more workers causing economic stagnation.

And while sweeping last-minute deals like the one passed as a solution to the fiscal cliff generate headlines, rapidly shifting, unpredictable promulgation of regulations represent a destabilizing factor that have hung over our economy for decades.

Fortunately, the goal of modernizing and improving this system is both politically attainable and broadly supported by the public.

In order to better meet the goals of both preserving and protecting safety and the environment and stabilizing the economic landscape, our regulatory system should be adapted for the 21st Century and seek to be efficient, accountable, and fair:
 
· Improved risk assessment, for instance, would ensure that the best available scientific data was at the heart of every regulatory push.
· Commonsense cost-benefit analysis can and should be incorporated into the rulemaking process so that regulations strike the right balance between the benefits they bring to society and he costs they impose.
· Regulatory reform should also include an honest and transparent peer review process that ensures objective experts have the ability to shape rules before they are enshrined into law.
· Every rule should be subjected to ongoing review – through the courts and Congressional oversight – in order to ensure that the system functions in a way that is responsive to both needed improvements.
· Federal agencies should prioritize compliance over enforcement and place greater emphasis on promoting compliance than they do on issuing harsh penalties, particularly on small businesses.


Reforms that meet these goals are within reach.
 
Political theater, no matter how compelling, will not fix what ails our economy. Growth, driven by small businesses around the nation, will necessarily be the engine that carries our economy beyond the periodic fiscal catastrophes that have defined our recent experience. 

Washington can help spur economic growth today by putting in place a regulatory system that not only allows, but also encourages, a new economic expansion.
 
Lincoln, a former Democratic Senator from Arkansas, chairs the Small Businesses for Sensible Regulations Coalition. Danner is president and CEO of the National Federation of Independent Business, the nation's leading small business association.

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