Hatch, Blunt, Ernst Introduce Legislation to Reduce Outdated Regulations, Spur Job Creation and Economic Growth

Lawmakers proposed a new approach to tackling the problems posed by outdated regulations. 

U.S. Senators Orrin Hatch, R-Utah, Roy Blunt, R-Mo., and Joni Ernst, R-Iowa, introduced S. 1683, the Searching for and Cutting Regulations that are Unnecessarily Burdensome—or “SCRUB”—Act of 2015. This bill establishes a commission-based procedure to reduce the federal regulatory burden on the economy.

“The accumulated weight of federal regulations is holding back job creation and hurting family budgets,” observed Sen. Hatch. “Every President since Jimmy Carter has acknowledged the need to get outdated regulations off the books. Nevertheless, both Democrat and Republican administrations have failed to make meaningful reductions in the unnecessary costs that red tape imposes on the economy. To turn this longstanding commitment of both parties into a reality, we need to take the responsibility of reviewing old regulations away from the bureaucrats that keep failing at that task. The SCRUB Act provides a powerful, fair, and proven means of achieving this common-sense, bipartisan goal.”

“American households, family farms and small businesses are hampered under the current weight of federal regulations,” said Sen. Ernst. “The SCRUB Act is a common-sense proposal that enacts meaningful reforms to our federal government’s outdated and vast regulatory system, and works to ease the burden on household and small business budgets. This legislation forces Washington to stop and consider the real impact of existing major regulations felt by families in Iowa and across the country.  Additionally, the SCRUB Act lays the foundation to find inclusive solutions to unlock the drivers of our economy who have been stymied by unnecessary overregulation, ease the burden on Americans’ pocketbooks, and open up new opportunities lost by a cloud of overregulation.”

Unjustified Costs of Old Regulations

Federal regulations now impose a burden of $1.88 trillion on the economy, according to a recent study by the Competitive Enterprise Institute.  That amounts to roughly $15,000 per household, 11% of the nation’s gross domestic product, and nearly $500 billion more than individual and corporate federal income tax revenue combined. At the end of 2014, the Code of Federal Regulations contained a massive 175,000 pages of regulations in 236 volumes. Nevertheless, retrospective review efforts by administrations of both parties have consistently failed to yield meaningful reductions in the regulatory burden. In fact, one study by the American Action Forum found that the Obama administration’s retrospective review plans actually imposed $23 billion in new costs on the economy.

Using Past Successes to Guide a New Approach

The SCRUB Act establishes a bipartisan, blue-ribbon commission modeled on previous successes to review existing federal regulations and identify those that should be repealed to reduce unnecessary regulatory burdens. The Act sets the Commission’s goal as the reduction of at least 15 percent in the cumulative costs of federal regulation with a minimal reduction in the overall effectiveness of such regulation. Upon the Commission’s review, the legislation requires that annual and final Commission repeal recommendations for presented as Joint Resolutions for expedited consideration and approval by Congress. If the Commission’s recommendations are enacted, repeal is required by law.

The legislation prioritizes for review regulations that are major rules, have been in effect more than 15 years, impose paperwork burdens that could be reduced substantially without significantly diminishing regulatory effectiveness, impose disproportionately high costs on small businesses, or could be strengthened in their effectiveness while reducing regulatory costs. It also establishes additional key factors to be taken into account when identifying regulations for repeal—for example, regulations that: have been rendered obsolete by technological or market changes; have achieved their goals and can be repealed without target problems recurring; are ineffective; overlap, duplicate or conflict with other federal regulations or with state and local regulations; or impose costs that are not justified by benefits produced for society within the United States.

For any given regulation, the Commission is authorized to recommend either immediate repeal or repeal through a flexible “cut-go” process, whereby agencies would have to offset the costs of new regulations by repealing Commission-identified regulations of equal or greater cost. These procedures allow speedy repeal in the most urgent cases and staggered repeal, modification, or replacement of others to assure a smooth process for agencies, affected entities, and the public.

Coordinated Efforts across Capitol Hill

Rep. Jason Smith (R-Mo.) has introduced H.R. 1155, companion legislation in the House of Representatives. The House Judiciary Committee’s Subcommittee on Regulatory Reform, Commercial, and Antitrust Law held a hearing on the bill on March 2nd, and the full Judiciary Committee voted to approve the legislation and send it to the House floor on March 24th.