Thursday, August 29, 2013

House Legislation Would Reduce Regulations Two for One

Legislation introduced in the House would require any federal agency issuing a new regulation to repeal two existing regulations before the new one takes effect. The One In, Two Out Act, HR 2997,  is sponsored by Rep. Michael McCaul (R-TX), who said that it is modeled on a successful U.K. policy. Specifically, requires a federal agency to assess the net cost of complying with any proposed new regulation. For major regulations with an annual economic cost of more than $100 million, a deregulatory measure must be found that reduces the net cost by at least the same amount before the new regulation may take effect.
Specifically, a federal regulatory agency may not issue a major rule unless it has repealed two or more rules that, to the extent practicable, are related to the major rule; and the cost of the new major rule is less than or equal to the cost of the rules repealed. The bill is cosponsored by, among others, Rep. K. Michael Conaway (R-TX), Chair of the Commodities and Risk Management Subcommittee and Rep. Randy Neugebauer, Chair of the Housing and Insurance Subcommittee.

When this policy was enacted in the UK, related Rep. McCaul, agencies proposed a total of 157 regulatory measures of which 119 would have imposed a burden on business. After six months, only 46 regulations remained, only 11 of which imposed a net cost on business. Under the U.K ``one in, two out’’ rule, when policymakers need to introduce a new regulation, and where there is a cost to complying with that regulation, they have to remove or modify an existing regulation with double the cost to business.