Sponsored by NFIB — The Voice of Small Business

House passes bill to reform EPA science panel

Wednesday, 19 November 2014

On Tuesday. the House passed H.R. 1422, which would change the process of selecting the members of the Environmental Protection Agency’s Scientific Advisory Board. The legislation is meant to ensure greater transparency in the rule-making process.

The bill would require, among other provisions, to have local and state member make up at least ten percent of the board, meant to create greater trust between state and federal officials.

According to to Representative Chris Stewart (R-Utah), “It’s through this bill we can not only improve that process, but also restore trust between the American people and the federal government.”

Read more about the legislation here.  

Urgency grows for Obama’s regs agenda

Monday, 17 November 2014

This week, Dan Bosch, NFIB’s Regulatory Policy Manager, was quoted in an article, “Urgency grows for Obama’s regs agenda” in The Hill. The piece highlights how the midterm election has impacted the atmosphere in Washington surrounding the federal rule-making process.

According to Dan Bosch, “Far too often agencies do cost and benefit calculations and look at all types of benefits, even tertiary effects, but only look at the direct cost of the rule imposed,” said . “We would like agencies to account for reasonable foreseeable costs.”

Read the entire article here.

EPA Clean Water Act Comment Period Closes Today

Friday, 14 November 2014

In April 2014, the Environmental Protection Agency (EPA) proposed an expansion to the Clean Water Act to include inland watersheds, farm ponds, and ditches, giving the agency jurisdiction to more than 41% of the continental United States. Unsurprisingly, this rule has faced significant backlash in the subsequent months, causing the EPA to extend the comment period for this rule twice. Today marks the final day of the comment period.

The NFIB has lead the way in educating our members about this rule, submitting comments to the EPA about the rule, creating an information page, and putting together an infographic. With the comment period drawing to a close, it’s time for small business owners to speak out against this expansive government overreach.

New Congress = New Opportunity for Accountable Regulatory Agencies

Monday, 10 November 2014

After the results from Election Day were reported, a lot of commentary focused on priorities for the next Congress.  Unsurprisingly, one topic that continues to emerge in the discussion is regulatory reform.  There is a path in the next year to pass real, substantive reform.

It was reported this week that the House is planning to vote later this month to increase the transparency in the scientific process behind major EPA rules. In fact, House Majority Leader Kevin McCarthy’s (R-Calif.) stated that regulatory reform would be a top priority for the new Congress.  Moreover, incoming Senate Majority Leader Mitch McConnell (R-Ky.) noted this week that stopping government overreach and reining in the EPA would be a focus for the Senate in the upcoming year.

The very fact that regulatory reform is being discussed in a substantive way is a good sign for small business owners across the country. As the New Year approaches, we hope these conversations continue and lead to common sense regulatory reform.

Bad public policy hinders small business

Tuesday, 4 November 2014

Dan Bosch, manager of regulatory policy at NFIB, penned an opinion editorial in The Hill this week about the Clean Water Act, which will expand the definition of navigable waters to include standing water and ditches. The piece highlights the growing concern amongst farmers and small businesses about the new regulatory requirements.

According to Bosch, “For small business owners, farmers, and manufacturers, the change could require special permitting to expand their business, clear vegetation or modify their facilities. Any alteration to a federal ‘water,’ including those that are dry most of the year, could require costly and time-consuming permitting. A recent U.S. Supreme Court case cited the average cost of a permit to be $270,000. Violating the regulation would be punishable by fines of up to $37,500 per day.”

Read the entire piece here.

Reg Reform Could Create New Trust in Washington

Monday, 3 November 2014

Over the last few years, an increasingly polarized Washington has created widespread distrust in government agencies and elected officials across the country. With Congresses approval at 16 percent, a historic low, the distance between Washington and the general public has grown, feeding a vicious cycle of cynicism as the election approaches.

Who can blame the general public for being weary of direction Washington is headed? The last couple of years have been littered with costly new regulations, Washington scandals, and sluggish economic growth.

When Washington has done major overhauls recently, the problem of distrust has become exacerbated. Take, for instance, healthcare reform. In 2010, the Administration signed into law the Affordable Care Act, also known as Obamacare, a highly controversial piece of legislation. The subsequent rollout of insurance exchanges created widespread confusion, including a botched website launch, that called into question the effectiveness of any sort of government reform. Previously, a financial meltdown produced a bailout for large Wall Street firms and new restrictions for the banking and insurance markets.

Examples, like this, illustrate the larger problem with the federal government: Washington needs to change in order to be trusted by the public, but the public does not trust Washington to make this change.

Fortunately, there is one set of reforms that, if done correctly, could change the narrative of government –regulatory reform. In 2010, President Obama published an Executive Order on regulatory reform, calling on federal agencies to be more transparent and efficient in the rule-making process. Little improvement can be found in the past four years. Being a simple way to jumpstart the economy, regulatory reform could be the change that ends the cycle of cynicism in Washington.

As American takes to the polls on Election Day, it’s critical that we send people to Washington who are willing to spur real change: Build trust by reforming regulatory systems.

Federal Regs System Is Still A Problem Fifty Years Later

Wednesday, 29 October 2014

This week marks the 50th anniversary of Ronald Reagan’s speech, “A Time for Choosing,” which shined a national spotlight on Reagan and helped launch his political career. In the speech, Reagan stresses the importance and ideological motivation behind a smaller, more efficient form of government, noting the economic burden of overregulation.

According to Reagan, “Federal employees—federal employees number two and a half million; and federal, state, and local, one out of six of the nation’s work force employed by government. These proliferating bureaus with their thousands of regulations have cost us many of our constitutional safeguards. How many of us realize that today federal agents can invade a man’s property without a warrant? They can impose a fine without a formal hearing, let alone a trial by jury? And they can seize and sell his property at auction to enforce the payment of that fine.

Sadly, this quote is still rings true. The total cost of regulations totaling over $2 trillion in 2012, and as of last spring, there were over 3,300 more federal regulations in queue ready to be handed down from Washington. Likewise, polls continue to show federal regulations as a top challenge facing small business owners across the nation.

It’s clear small businesses need a change. As Election Day nears, it’s time we put candidates in Washington who understand the challenge small business owners are facing and work together to find solutions to these problems.

Read Ronald Reagan’s entire speech here.

Washington Misleading the Country On EPA’s Water Rule

Monday, 27 October 2014

A group of 25 Republican senators led by Sens. John Barrasso (R-Wyo.), Ted Cruz (R-Texas), Mitch McConnell (R-Ky.) and David Vitter (R-La.) joined together to suggest the Administration is misleading the general public about the size and scope of the EPA’s forthcoming Waters of the United States regulation. In light of the upcoming election, the lawmakers claim officials are downplaying the negative impact of the rule for political gain.

According to reports, “In particular, the senators take issue with the administration’s position that the rule responds to previous requests for a Clean Water Act rulemaking and accuse officials of ‘insinuating that opposition to the proposed rule is equivalent to opposition to clean water.’ Further, they charge that the EPA has sought to ‘delegitimize’ concerns about the proposed rule, while misrepresenting the likely impacts of the rule.”

Read more here.

EPA proposal would handicap small business

Tuesday, 21 October 2014

NFIB-Ohio’s Executive Director Roger Greiger penned a letter to the editor in The Columbus Dispatch about how EPA’s proposed expansion to the Clean Water Act would negatively affect small businesses in Ohio and across the country. The EPA is considering changing the definition of navigable waters to expand the agency’s jurisdiction over small bodies of water, including farm ponds, seasonal streams, and puddles.

According to Greiger, “Small businesses would be those most affected by these regulations, and they feel the EPA should spend less time posing with environmentalists and spend more time reaching out to explain how the agency arrived at the notion that it has the authority to implement these rules. If the EPA were to reach out to small businesses, many would point out that the proposed rules do nothing to clarify the definition of waterways, and instead increase uncertainty over which waters are covered by requiring most waterways to be evaluated case by case.”

NFIB has been actively engaged on this issue. Last week, the organization submitted comments to the EPA, highlighting that the EPA had not followed the Regulatory Flexibility Act, which mandates that agencies consider the impact of a rule on small businesses. The NFIB concluded that this rule “increases regulatory burdens on small business landowners.”

Read the entire letter to the editor here.

Captivity and the Need for Regulatory Flexibility

Monday, 20 October 2014

A big story in the news this week was on “regulatory capture,” a relatively foreign term to many outside the field of economics. NPR aired secretly taped recordings between bank examiners from the New York Federal Reserve and executives at Goldman Sachs, exposing the regulators as timid and deferential to the bankers. The tapes suggest federal regulators had “become more oriented to the institution they are supervising than to representing the public interest.” The very definition of regulatory capture.

More importantly than the standard definition of “regulatory capture,” though, situations like this display the larger, systemic problem of design of institutions.

According to Vox.com, “The scandal is less about Goldman’s behavior and more about the Fed’s inability or unwillingness to uphold the rule of law. Reasonable people can debate whether specific regulations are necessary, but even the best set of rules is totally insufficient if paired with an enforcement system that applies them inconsistently or not at all. Fair and consistent application of regulations is a prerequisite for having a regulatory regime of any kind. When regulators act the way the TAL/ProPublica report show New York Fed regulators acting, it suggests that we need to reform or revamp regulatory institutions before we can expect any new rules they’re charged with enforcing to do much of anything.”

This story raises the question: What is the best way for an agency to ensure industries comply with regulations?

If a federal agency wants to create a rule, they can enforce the rule by A) monitoring the industry through each step to reach the desired outcome or by B) ensuring that the industry achieves the outcome. In the Goldman Sachs story, the Federal Reserve followed the first option, and the agency’s rigged, time-consuming process of monitoring became an institutional problem, susceptible to the influences of the bankers.  Examples like this, therefore, appear to give credence to the need for greater flexibility within the regulatory process; an approach more like option B.

Endemic problems of regulatory capture should remind us that the outcome of a regulation is more important than the process or means of regulating. As a result, flexibility in pursuit of the right outcomes should be a virtue for the regulated and regulators alike.

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