WASHINGTON – Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman, ID-Conn., and Ranking Member Susan Collins, R-Me., led an illuminating discussion Thursday on the benefits of federal regulations to public health, safety, and the environment and the costs regulations incur, especially for small businesses.

At a hearing, titled “Federal Regulations: How Best to Advance the Public Interest?”, the Senators engaged witness Cass Sunstein, who heads the Office of Information and Regulatory Affairs (OIRA), which serves as the nerve center for regulatory policy, on ways to improve the process of writing and implementing regulations.

“Smart regulations don’t just help individuals, they can also help industry by providing a predictable and even playing field in a given sector or serving other goals,” Lieberman said. “But many regulations do impose costs and requirements on businesses, so it is important to continually oversee the process to ensure it is achieving the law’s goals with as little extra cost and requirements as possible. That’s what we are doing here today.”

Collins said:  “Too often it seems federal agencies do not take into account the impact on small businesses and job growth before imposing new rules and regulations.  Without thoughtful analysis of the impact of regulations, we risk imposing an unnecessary burden on job creation – an unacceptable result at a time when so many Americans remain jobless.” 

The Office of Management and Budget, the department in which OIRA is located, is required to report annually on the aggregate costs and benefits of the most significant regulations. That report has consistently shown that the benefits of major regulations far outweigh the costs – in amounts equal to tens of billions of dollars. A recent EPA analysis of the Clean Air Act Amendments of 1990 estimated the economic benefits of those rules at $1.3 trillion dollars – roughly 25 times the costs of the rules. 

Existing procedures call for analysis of both costs and benefits before a new regulation can be put in place. But that does not mean that every rule is necessary or as cost-effective as it could be.

Sunstein reported on President Obama’s order that agencies review their regulations and recommend ways to change, streamline, modify, or eliminate the overly burdensome ones. The Administration is working, Sunstein said, to strengthen and clarify guidelines for evaluating the costs and benefits of proposed regulations and to better coordinate and simplify regulations to reduce costs and promote certainty.

Agencies are already changing some of their proposed regulations to make them more cost-effective and less burdensome, he said.  

Lieberman announced a follow-up hearing that may be held in May to analyze a number of legislative proposals pertaining to the regulatory process, including one by Collins.