A 21st Century Regulatory System

The White House recently unveiled plans by 30 different federal agencies to make sure that the regulations they enforce are protecting Americans’ health and well-being without imposing unnecessary or excessive costs. These agencies will rewrite or remove regulations that have been on the books for decades to achieve their goals at lower costs and abolish regulations that have become obsolete.

Examples of changes now underway include:

• Removing regulations that require outdated technologies, such as film-X-rays instead of digital.
• Eliminating the regulation requiring some gas stations to install vapor recovery systems on their hoses, because vapor recovery is now built into the gas tanks of cars, saving gas station owners about $670 million over the next decade.
• Eliminating 1.9 million annual hours of redundant reporting requirements at the Occupational Safety and Health Administration (OSHA), and harmonizing its hazard classifications with other countries to save $585 million or more per year for employers.

The Administration has committed to completing this thorough review and ensuring that the United States has a regulatory system that protects Americans’ health and well-being, while promoting innovation, competition, and economic prosperity – “.”

Getting rid of outdated regulations and making regulations smarter benefits America. But abolishing all regulation, even the ones that provide important benefits, is not smart. Some regulations are critically important for the country and have benefits that far outweigh the costs.

The administration has been smart about regulations. It conducts a rigorous cost-benefit analysis of individual regulations before they are put into effect and it often opts for lower cost rules when they generate greater net benefits. If you look at the benefits and costs of major regulations issued by this administration in fiscal years 2009 and 2010, the estimated benefits are over five times larger than the estimated costs. The net benefits are over ten times those during the first two years of the Bush Administration, and over three times those during the first two years of the Clinton Administration. Furthermore, there has been no increase in rulemaking in this Administration. On the contrary, the number of rules issued in the first two years of this Administration is approximately the same as the number of rules issued in the first two years of the Bush Administration.