On Wednesday, the House Judiciary Committee approved the Searching for and Cutting Regulations that are Unnecessarily Burdensome Act of 2014 (H.R. 4874, the SCRUB Act). Introduced by Rep. Jason Smith (R-MO), the SCRUB Act would establish a Retrospective Regulatory Review Commission to identify regulations that impose unnecessary costs and develop recommendations for their repeal. The bill has four original cosponsors, including Rep. Spencer Bachus (R-AL), Chairman of the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law. The NAM appreciates the leadership of Rep. Smith and Chairman Bachus and their efforts to improve the regulatory environment in the United States. Manufacturers are disproportionately impacted by regulations, so the unnecessary burdens imposed by regulators greatly impact their ability to grow their businesses, create jobs and compete in the global economy.
H.R. 4874 would task the Retrospective Regulatory Review Commission with a goal of reducing the cumulative, government-wide costs of regulations by 15 percent. It also would direct the commission to focus on major rules that have been in effect for more than 15 years, impose unnecessary paperwork burdens and impose disproportionately high costs on small entities. Additional guidelines for the commission as it conducts its review are included in the bill as well. For example, the commission should focus on a regulation or set of regulations that is ineffective, unnecessary or obsolete; duplicates or conflicts with other federal rules and, to the extent feasible, with state or local rules; has costs or burdens that are overly excessive as compared to regulatory alternatives; or harms economic competitiveness or inhibits innovation or economic growth.
Though President Obama’s Executive Order 13563 on retrospective review has yielded some positive reforms, the effort and similar campaigns before have not yielded the desired result of reducing unnecessary costs and improving the regulatory environment in which manufacturers and business in the U.S. operate. Agencies need incentives to devote the needed resources for retrospective reviews that would yield reforms and decrease unnecessary regulatory burdens. The SCRUB Act would help provide incentive by instituting a mechanism for statutorily requiring agencies to repeal rules that provide no benefit or are unnecessarily burdensome.
Further, any cost reductions as a result of current retrospective reviews are dwarfed by the continuous rulemaking activities of federal agencies. Through the end of May, the Obama Administration has finalized 433 major regulations, defined as rules that would each result in an annual effect on the economy of $100 million or more. In order to succeed in achieving actual reduction in costs, institutional reform to our regulatory system is necessary. H.R. 4748 takes a novel approach to reducing regulatory costs by directing the regulatory review commission to designate rules that are eligible for repeal when agencies promulgate new rules. Under the bill, an agency would be required to repeal a designated rule before issuing its new regulation. Finally, the bill would require agencies, whenever feasible, to develop plans for conducting retrospective reviews of a newly proposed rules. Importantly, retrospective reviews could provide agencies an opportunity to analyze, revise and improve techniques and models used for predicting more accurate benefit and cost estimates for future regulations.
We urge Congress to pass the SCRUB Act and force agencies to reduce the inefficiencies of our regulatory system and the unnecessary costs imposed on manufacturers and other businesses.