Regulation Policy

NCPA Brief Analysis: Regulatory Improvement act

A first step in the reform of the federal regulatory process would be passage of the Regulatory Improvement Act of 1997, says environmental policy analyst H. Sterling Burnett of the National Center for Policy Analysis.

This bill, sponsored by Sen. Fred Thompson (R-Tenn.) and Sen. Carl Levin (D- Mich.), would require regulatory agencies to publicly disclose certain types of information before implementing major regulations -- those with an economic impact of more than a $100 million.

Supporters of the bill argue that costly, ineffective and even harmful federal regulations are increasingly pervasive. Studies have found that in 1994 alone, businesses and individuals spent more than $6,000 per household in higher costs for goods and services and spending resources on compliance and paperwork (see figure).

Based on the public's right to know how and why regulations are formulated, the bill would require three types of information to be gathered and publicly disclosed before regulations become effective.

  • A cost-benefit analysis would be required for major regulations, allowing citizens to compare their estimated costs with the benefits they are likely to produce.

  • Regulatory agencies would also be required to choose the least costly methods available to fix particular health, safety and environmental problems -- or if they choose more expensive solutions, explain why.

  • And federal agencies would have to disclose the relative risks the regulations are meant to reduce, what scientific evidence was used to estimate these risks and what risk the regulations themselves pose.

Cost-benefit analysis would enable people to compare various options, all of which may be beneficial in some way but not all of which can be simultaneously undertaken. And by making the science transparent, the legislation hopes to head off the kinds of acrimonious charges made about recent clean air regulations.

Source: H. Sterling Burnett, "Regulating the Regulators: The 1997 Regulatory Improvement Act," Brief Analysis No. 258, March 2, 1998, National Center for Policy Analysis, 12770 Coit Rd., Suite 800, Dallas, Texas 75251, (972) 386- 6272.

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