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Current System Fails to Consider Cumulative Effects of Regulation on Industry, Manufacturing Jobs

WASHINGTON, D.C. (March 9, 2011) - In  testimony before the U.S. House Subcommittee on Regulatory Affairs, Stimulus Oversight & Government Spending this morning, American Chemistry Council (ACC) Vice President of Regulatory and Technical Affairs Michael Walls called for improvements to the federal regulatory system, including a requirement for cumulative impact assessments of proposed rules, to protect U.S. innovation, investment and jobs. 

"If manufacturing is to make a significant contribution to economic recovery, including the creation and maintenance of well-paying jobs, it is imperative that we have an accurate understanding of the impact of proposed regulations on industry," Walls stated at today's hearing. "The full regulatory burden for a particular sector can only be known if the cumulative impact of overlapping regulations is identified.

"The lack of cumulative impact assessments is a fundamental shortcoming in the way government agencies develop and evaluate proposed rules," Walls continued. "The current focus on regulatory reform by President Obama and the House leadership offers an opportunity to fix the regulatory system so proposed rules will be more rational from the start."

Walls offered four recommendations to improve the economic analysis of proposed rules:

  1. Conduct cumulative impact assessments to identify the full regulatory burden being created by a proposed rule.
  2. Track the sectors affected by new regulations so the most heavily regulated sectors can be easily identified and regulations can be streamlined appropriately.
  3. Seek input from the businesses that will be affected before developing rules in order to better understand the effects that a potential rule may have.
  4. Conduct a more comprehensive analysis of the impact of a proposed rule on jobs that considers the type and quality of jobs being affected.  

To improve the regulatory process, ACC is calling for federal agencies to improve economic models used in impact analyses; the creation of consistent standards for considering scientific data used to develop rules; and greater transparency in the rulemaking process in order to better understand methodologies and impacts. ACC first called for these changes in letters to OMB Director Jacob Lew and Congressman Darrell Issa earlier this year.


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