op-ed

Congress Owes It To American Businesses To Increase Regulatory Transparency

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Thomas Aiello Government affairs associate at the National Taxpayers Union
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Federal executive agencies have been allowed to use an opaque rulemaking process to create new laws out of thin air and turn millions of business owners across the United States into criminals. The time has come to rein in the excesses of these executive agencies and bring sunlight to a process that has harmed countless American businesses and workers.

Rules and regulations are developed by agencies to implement laws passed by Congress so long as they are within the scope of the legislation. During the rulemaking process, agencies are supposed to receive public comment and use their input to achieve the best possible policy. This is a cornerstone of an open and transparent regulatory system. Yet this system changed under the previous administration. Agencies often evaded the open process and installed unilaterally binding requirements through guidance documents, memos, bulletins, news releases or even blog posts. These directives are supposed to be used to clarify existing law rather than be used to change current law or dictate new standards to determine compliance within the law.

Federal agencies often issue guidance documents, but will often at a later time suggest that their guidance should be interpreted as legally binding. As a result, agencies will frequently allege a firm violated their statute as it violated a guidance document, even though the agency document may be vague or obscure. This, in effect, has turned guidance documents into a de facto regulatory scheme.

Every day, millions of business owners across the United States commit a criminal offense, according to former Harvard law professor Alan Dershowitz. Under the Obama bureaucracy the layers of red tape increased dramatically due to these loose definitions of “regulation” and enforcement mechanisms.

It’s hard enough for small “mom & pop” shops to keep up to date with every new regulation or obscure rule that comes from the Washington bureaucracy. And many times these businesses can’t even find a rule if they tried. As it stands federal agencies are not obligated to post their rules online in a central location. This only adds to the bureaucratic complexity businesses face when monitoring and complying with federal rules.

Sidestepping the formal rulemaking process is problematic in a free and open society. Ensuring final regulations are easily accessible is fundamental to an agency’s effectiveness and critical for the public’s ability to hold the agency accountable. Hiding rules that could affect businesses in the shadows is not the appropriate oversight mechanism that our founders envisioned nor one that Americans should be comfortable with.

Thankfully, House Republican Study Committee Chairman Mark Walker (R-NC) and Senate Government Oversight Chairman Ron Johnson (R-WI) have introduced common sense legislation end this practice. Titled the “Guidance Out Of Darkness Act of 2018,” S. 2296 and H.R. 4809 will require agencies to post their regulatory guidance documents in a central location on their website. This legislation is an important step toward curbing the creeping regulatory abuse that attempts to avoid the democratic process. Requiring more transparency, and ensuring that agencies post all guidance documents and memos online is a commonsense solution in holding the bureaucracy accountable.

According to Chairman Walker, for businesses to “comply with their burdensome rules, they should at a minimum make the information available and easily accessible.” We at the National Taxpayers Union agree completely, which is why we offered an endorsement for this bill and have urged for its swift consideration.

This proposal compliments the massive undertaking Congress and the president did in 2017 to repeal many burdensome regulations and red tape strangling American businesses. Excessive regulation costs businesses over $2 trillion per year, or about $233,000 in annual cost burden for the average U.S. company. When government imposes regulations on businesses it drives up the cost of doing business, much like it is when government imposes an additional tax. It is no surprise that small businesses continue to put regulatory burdens at or near the top of their list of concerns.

This legislation will be welcomed news to the small business community and will further level the playing field for regulated industries, bestowing enhanced opportunity to push back against ambiguous guidance documents masquerading as regulations in the dark.

Thomas Aiello is the policy and government affairs associate at the National Taxpayers Union, a nonprofit citizen group whose members work every day for lower taxes and smaller government at all levels.


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.