Tuesday, November 01, 2011

Former Senator Blanche Lincoln Calls On Administration to Reform Federal Regulatory Process

In a letter to the Obama Administration, former US Senator Blanche Lincoln, a key author of Title VII of Dodd-Frank, recommended the implementation of five principles to reform the federal regulatory process, and in particular aid small businesses. The former Senator is the National Chairwoman for Small Businesses for Sensible Regulations and a former Chair of the Senate Committee on Agriculture.

First, the former Senator urged the Administration to invite small-business input in the earliest stages of crafting regulation. This will promote better understanding about which problems proposed regulations are supposed to fix and result in regulations that meet agency objectives and provide flexibility for businesses. Too often, said Ms. Lincoln, regulators generating rules have little to no contact with those who will be required to implement them. They cannot be expected to understand the impact, feasibility, or unintended consequences of their actions without inviting small businesses to have a more prominent seat at the table. The second principle is that the Administration should promote greater compliance assistance for small businesses mandated to comply with multiple complex regulations and waive fines and penalties for first offenses involving minor errors on regulatory paperwork.

The third principle is that every major regulation should undergo rigorous benefit-cost analysis. Regulators should estimate the long-term benefits and costs of new regulations using the best available models and adopt only those regulations that impose the least burden on the economy at large. Regulatory agencies often highlight indirect benefits of regulatory proposals, but should analyze and make public the indirect costs to consumers as well. In addition, the collective impacts of more and more regulations on small businesses must be considered

The fourth principle is that regulations should be based on objective data and hard science. Federal agencies should adhere to a clear and consistent process for evaluating scientific studies and models justifying regulation as well as for selecting advisory panels based on their knowledge and experience.

The fifth principle is that the regulatory process should have more transparency and accountability. Federal regulators should share publicly the data, methods and models underlying federal regulatory decision-making, including any uncertainties stemming from their analysis. To ensure transparency, the federal government should establish clear standards for assessing risks and calculating benefits and cost. In addition, Congress and the courts should oversee the agencies’ work and hold them accountable for adhering to these principles