Taking on the regulatory process

Published on January 13, 2012

By Frank Knapp Jr. | Charlotte Business Journal

Congress is considering a proposal that purports to offer common-sense rules to affect how federal agencies analyze costs and benefits. Instead it will be disastrous to taxpayers, small and mid-size businesses and the country as a whole.

The Regulatory Accountability Act of 2011, which passed the U.S. House, provides extensively detailed procedures for agencies before they promulgate regulations that are projected to have an effect of at least $100 million on the U.S. economy.

However, a thorough reading of the proposal leads to three conclusions.

First, it will likely drive up the cost of almost every rule-making process and budget of a federal agency.

Second, federally elected officials will be stripped of their ability to responsibly lead our country.

And third, it’s a highway to never-ending lawsuits by special interests against the federal government.

The bill is designed to micromanage every federal agency that needs to create rules to carry out legislation passed by Congress. By doing so, it turns over 60 years of effective regulation promulgation under the Administration Procedures Act into a protracted process that will stretch the time needed for rule-making into decades.

Federal agencies will need to expand their budgets by untold billions of dollars to comply with the Regulatory Accountability Act and to perform their usual functions of protecting the public and small businesses from unsafe products and practices.

Congressional and presidential governance will be replaced by bureaucratic decisions designed to appease special interests. Elected leaders will be turned into figureheads whose every effort to exercise the will of the voters will be thwarted by the will of government bureaucrats, special interests and the courts.

Finally, the proposal is a corporate lobbyist’s dream. It appears to have been written by corporate attorneys for corporate attorneys.

Every aspect of RAA is geared toward encouraging special interests to legally challenge every regulation of an agency.

Even frivolous lawsuits are protected because the bill defines “substantial evidence” for a lawsuit to be anything the special interest thinks is “reasonable.”

The 32-page bill mentions judicial review, litigation, courts and other lawsuit terminology 18 times. It even includes a provision guaranteeing “immediate judicial review” for any special interest on every aspect of the prescribed rule-making process.

Even the decision by an agency that a rule will not meet the minimum $100 million threshold can be challenged in court. That could make the development of any rule subject to an extensive and expensive process.

There is no way to describe RAA in any other simpler terms than to call it what it is – a budget-busting, anti-democracy, Corporate Attorneys Full Employment Act.

It’s no wonder supporters of the legislation are primarily U.S.-based multinational corporations. Increasing the cost of government for taxpayers is not a concern to these corporations that use offshore tax havens and other practices to avoid paying their fair share of U.S. taxes. If federal-agency budgets must be increased because of RAA, it won’t be the multinationals footing the bill.

The multinationals have no allegiance to government and democracy. Their shareholders and executives are the only constituents they serve. A diminishing of our democratic governance works to give these businesses more power.

The only authorities these multinationals recognize are the courts. With their enormous wealth, multinationals eagerly pay expensive corporate attorneys to delay, change or kill any government regulation that stands in the way of their profits.

This means that the Regulatory Accountability Act threatens every American citizen’s health and safety.

In regard to the No. 1 issue today – jobs (for people other than corporate attorneys) – RAA will create none in the private sector. Instead, it endangers the well-regulated marketplace essential in establishing fair competition between small, mid-size and big business.

If enacted, the law would simply allow big business to push smaller competitors out of the marketplace, thus killing jobs.

This is not just bad policy. It’s extremist legislation designed to protect the very entities from which the rest of us need protection – multinational corporations.

Frank Knapp Jr. is vice chairman of the American Sustainable Business Council and president and chief executive of the S.C. Small Business Chamber of Commerce.

Original article: http://www.bizjournals.com/charlotte/print-edition/2012/01/13/taking-on-regulatory-process.html?page=all

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