Smarter Regulation

Winning the future requires promoting economic growth and job creation while also protecting the health and safety of the American people. On January 18, 2011, President Obama signed an important Executive Order designed to fulfill that goal.

The Executive Order emphasizes the need for predictability and for certainty -- and for achieving regulatory goals with the smartest and least costly tools. It directs agencies to seek public comments on rules, to minimize burdens on the private sector, to simplify and harmonize their regulations, to promote flexibility and freedom of choice, and to make sure that the benefits justify the costs. It also directs agencies, within 120 days, to produce plans for a government-wide review of existing regulations to determine whether they should be modified, streamlined, expanded, or repealed.

Also on January 18, the President signed a memorandum requiring agencies to take new steps to reduce regulatory burdens on small business. As the President wrote in the Wall Street Journal, “Small firms drive growth and create most new jobs in this country. We need to make sure nothing stands in their way.”

In the recent past, a great deal has happened to promote the President’s goals. Consider just a few examples:

• The Department of Energy, the Social Security Administration, and the Department of Commerce have asked the public for ideas about which regulations to streamline or repeal. Others will be following in the near future.
• The FDA has announced twenty-five significant reforms to its process for reviewing new medical devices, creating a smarter program that will promote innovation, keep jobs here at home, and bring safe, effective, and important technologies to patients more quickly.
• Responding to public comments, the Department of Labor has withdrawn its proposal to change workplace noise standards, emphasizing that “addressing this problem requires much more public outreach and many more resources than we had originally anticipated.”
• Listening to the concerns of many stakeholders, the Environmental Protection Agency has announced a three-year exemption of biomass from its greenhouse gas permitting rule.
• The Department of Labor has withdrawn its rule requiring reporting of musculoskeletal disorders, stating that it wants “greater input from small businesses on the impact of the proposal.”

Responding to employer concerns, the Department of Health and Human Services, the Department of Labor, and the Internal Revenue Service have amended the "grandfathering rule," which permits group health plans existing as of March 23, 2010 not to be subject to certain provisions of the Affordable Care Act. Under the amendment, employers with fully insured plans can now change carriers without losing their grandfathered status.

These recent steps follow others. In November 2010, the Office of Management and Budget announced no fewer than 72 burden reduction initiatives, designed to eliminate paperwork and reporting burdens on the American public. Many of these initiatives are well underway. They include simplification of the Free Application for Federal Student Aid form by the Department of Education; reduced burdens on air travelers and carriers from the Department of Homeland Security; greater use of electronic communication by the Environmental Protection Agency; reduced reporting requirements on employers from the Department of Labor; and reduced filing burdens from the Internal Revenue Service. All in all, these initiatives are expected to reduce reporting burdens on the American people by more than 60 million hours – each year.

At the same time that we are eliminating excessive requirements and burdens, we have a responsibility to protect the health and safety of the American people by proceeding with what the President calls “common sense rules of the road.” Just last week, the Environmental Protection Agency announced that it would develop a science-based standard to protect infants and young children by limiting the amount of perchlorate – an ingredient in rocket fuel – that can be allowed in tap water. Also last week, the Department of Labor proposed a rule to protect workers from mine operators who repeatedly violate health and safety requirements.

As recent developments have shown, we can advance plans to out innovate, out-educate and out build the world by eliminating unjustified regulatory burdens, even as we insist on common sense safeguards. But much more work needs to be done, and we’ll need your ideas and your help.

Cass Sunstein is Administrator of the Office of Information and Regulatory Affairs