Paring Back Unnecessary Regulations

Earlier this year, President Obama outlined his plan to create a 21st-century regulatory system – one that protects public health and welfare while promoting economic growth, innovation, competitiveness, and job creation. The President has called for an unprecedented government-wide review of regulations already on the books. As a result of that review, more than two dozen agencies identified initiatives to reduce burdens and save money.  In August, 26 agencies released regulatory review plans with over 500 reform initiatives. A mere fraction of the new initiatives will, alone, save more than $10 billion over the next five years; as progress continues, we expect to be able to deliver savings far in excess of that figure.

A common-sense regulatory system has a central role to play in protecting American families, but we should always strive to do that work as efficiently and effectively as possible. President Obama’s plan to make government stronger, faster, and more transparent will cut waste and provide better services for citizens.

The  President ordered an unprecedentedly ambitious government-wide review of existing federal regulations in January 2011. He directed agencies and departments to produce plans to eliminate red tape and to streamline current requirements.

In August 2011, agencies released their final regulatory reform plans, which include hundreds of initiatives that will reduce costs, simplify the system, and eliminate redundancy and inconsistency. The monetized savings from just a fraction of these reforms are likely to exceed $10 billion over the next five years. Significant burden-reducing rules from the Department of Labor, the Environmental Protection Agency, and the Department of Transportation alone are expected to save more than $4 billion over the next five years.

The reforms across the government span a wide range including:

• The Department of Health and Human Services will soon propose to remove unnecessary regulatory and reporting requirements now imposed on hospitals and other healthcare providers, potentially saving an anticipated $4 billion over the next five years.
• The Department of Labor is finalizing a rule to simplify and to improve hazard warnings for workers, likely saving employers over $2.5 billion over the next five years without compromising safety.
• The Department of Transportation is proposing a rule that will eliminate unnecessary regulation of the railroad industry, saving up to $340 million in the near future, and avoiding the risk that regulatory costs will be passed onto consumers.
• By the end of this year, the Internal Revenue Service will eliminate 55 million hours in annual paperwork burdens by consolidating reporting requirements and streamlining various tax forms.

Many of the new reforms focus specifically on small business. For example, the Department of Defense recently issued a new rule to accelerate payments on contracts to as many as 60,000 small businesses, thus improving their cash flow in an economically difficult time.

Perhaps more important, these plans explicitly recognize that the regulatory “lookback” is not a one-time endeavor. Agencies will continue to revisit existing rules, asking whether they should be updated, streamlined, or repealed, and they will do so in close consultation with the public. Ideas are welcome at any time.

These cost-reducing reforms complement, and do not displace, our continuing efforts to safeguard public safety and our environment. As President Obama has said, “We can make our economy stronger and more competitive, while meeting our fundamental responsibilities to one another.” The Obama Administration will continue to eliminate unnecesssary regulatory costs, while taking sensible, cost-effective, evidence-based steps to protect public health and welfare.