A recent George Mason University study of regulatory policy in all 50 states found Indiana ranks No. 1 for encouraging economic growth.
Because of steps taken by Hoosier policymakers, our state enacted a series of sensible reforms that strike the right balance between responsible government oversight and allowing job creators to operate free of crippling regulatory burdens. The result is an economic climate ripe for investment and opportunity.
Unfortunately, good laws on the state level can only go so far. When I am back home, I consistently hear about the negative impact of heavy-handed, misguided and inefficient federal regulations on Hoosier businesses of all sizes. Federal bureaucrats are regulating too many successful employers out of business or hamstringing their ability to expand.
A few examples:
- Businesses with fewer than 50 employees are choosing not to expand because of Obamacare.
- A new federal rule that imposes stricter standards on power plants is increasing electricity costs and hurting Indiana’s manufacturing sector.
- Recently enacted financial regulations have imposed what Indiana bankers refer to as an “avalanche” of new regulations. Independent and community banks serving Hoosiers are spending as much as 70 percent of their time and 10 percent of their net income on compliance reporting.
According to the U.S. Small Business Administration, the cost of complying with federal regulations exceeds $1.75 trillion every year, which amounts to more than $10,500 per American worker. Meanwhile, the number of pages in the Code of Federal Regulations has expanded from 71,224 in 1975 to 174,545 in 2012.
For small businesses in particular, Washington’s regulatory burden can be crushing. The SBA found that complying with federal regulations costs small businesses 36 percent more per employee than larger firms.
In many cases, this cost amounts to the difference between a small business hiring or not hiring additional employees. Meanwhile, the combined budgets of federal regulatory agencies have grown by 26 percent to $59 billion since 2008, while employment at these agencies has increased by 16 percent.
To help address this problem, today I am introducing the Sound Regulation Act, legislation that will help Indiana businesses focus on creating more jobs instead of more unnecessary paperwork.
Supported by the Indiana Chamber of Commerce and the Indiana Manufacturers Association, my bill would require every federal agency to engage in an extensive analysis to determine the actual cost, in dollars, of regulations under each agency’s jurisdiction.
Too many new federal rules that burden our job creators are created without any consideration of their economic impact. My legislation would use sound, nonpartisan data to discourage all federal regulations with costs that exceed their benefits.
The Sound Regulation Act would apply to all agencies of the federal government and would require cost-benefit reviews to take place every four years. This is a sensible proposal that should garner widespread support.
Just Indiana has done, unnecessary red tape and ineffective rules should be eliminated on the federal level. This simple step will provide a significant shot in the arm for Hoosier job creators and American workers everywhere.