The rules under consideration by the Commission can impact food manufacturers, clothing retailers, equipment manufacturers, even companies that give away free prizes to consumers. In its cost benefit analysis, the SEC, without any supply chain experience, estimated that the impacts would be felt by up to 5,551 public companies at a cost of $71 million. The SEC failed to study small business impacts as required by law and ignored basic facts.

For example, it is not unusual for companies to have 100,000 suppliers or to produce more than 40,000 different products. Many of those products likely include only trace amounts or even untraceable amounts of the minerals in question, sometimes through the use of recycled materials. Now the SEC wants American companies not only to audit their complex supply chains but also monitor those of vendors.

Not surprisingly, some industry estimates places costs on all businesses – large and small, public and private – as high as $16 billion. A Tulane University study commissioned by supporters of these rules put the costs at almost $8 billion with two-thirds of those falling on small businesses.

To fix this unworkable rule the business community offered constructive solutions including a recycling material exemption to incent less mining, safe harbors provision to limit liability, a de minimis exception to excuse trace mineral elements, and a phase-in period to allow companies to implement rules that will require massive changes in their operations.

Unfortunately, it appears that the SEC is likely to reject these common sense proposals. If enacted as they currently stand, these rules will harm our manufacturing base, saddle small businesses with more costs, and worse not solve the horrific issue at hand.

As it is, the SEC is ill-equipped to perform its fundamental missions. The Commission is understaffed and overworked leaving a capable few to achieve an incredible amount of work. This situation results in rules that are formulated improperly and without a clear understanding of their impacts.

That is why two studies from the U.S. Chamber of Commerce have made more than 50 recommendations to make it a more effective regulator. These include simple suggestions such as managerial accountability, hiring market based expertise, and enhanced cost-benefit analysis. Until the SEC fixes its internal shortcomings, it is unreasonable to think that they can or should oversee regulations with such far reaching consequences for such a broad segment of the business community.

Businesses can’t grow or raise capital in a tangle of well-intended but misguided regulations. Congress was wrong to make the SEC a new vehicle to project foreign, social policy. Instead of compounding the problem, we believe the SEC must follow the letter of the law by first conducting a true cost benefit analysis of these rules before they vote on them.

Despite best intentions, Congress got this wrong. The SEC is getting this wrong. Luckily, it’s not too late to go back to the drawing board and get it right.

Thomas P. Quaadman is vice president of the Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce.