Overregulation imposes significant costs on North American metals businessesDownload Talking Points
Regulations are necessary to ensure consumer and worker well-being, but overregulation imposes significant costs on Americans without improving their daily lives or enhancing their safety or prosperity. Today, regulatory bodies have as much, or even more, influence over our lives than Congress. In 2016, Congress passed just 214 laws while executive branch agencies issued 3,853 regulations. As a result, American consumers and businesses spend about $2 trillion each year, a sum equal to 12 percent of the total U.S. economy, to comply with federal regulations. These rules cost businesses approximately $10,000 per employee. What’s more, regulations disproportionately affect smaller firms, costing manufacturing businesses with less than 50 employees $34,671 per employee and firms with more than 100 employees $13,750 per employee. Finally, overregulation harms consumers by adding to the cost of goods. In 2016, the price increases from federal regulation totaled $23,498 per consumers.
Why It Matters
The direct and indirect costs of overregulation and the lack of transparency in the regulatory process reduce our industry’s ability to compete and prosper in the global marketplace. Regulatory uncertainty creates a risky and costly business climate, leading to high compliance costs, delayed research and development and the costs resulting from inefficient planning. Unnecessary regulations impose higher costs on the manufacturing industry and its customers. These costs stifle business investment and erode consumer demand, both of which inhibit economic growth. Reforming our regulatory system would encourage businesses to take additional risks, create more jobs and allow consumers to save or spend more of their hard-earned money.
Policymakers must –
- Make our regulatory framework more conducive to job and economic growth, ensuring that regulations solve problems, rather than benefit special interest groups.
- Require a nonpartisan, in-depth cost-benefit analysis for every proposed regulation.
- Secure congressional approval for any regulation with costs totaling more than $100 million.
- Put in place safeguards that prevent legislating by the regulatory agencies.
Coalitions and Partners:
Related Issues Important to the Industrial Metals Supply Chain
SEC "Conflict Minerals Rule"
As part of the 2010 Dodd-Frank Wall Street reform bill, Congress required the Securities and Exchange Commission (SEC) to write a regulation requiring certain manufacturers to report to the SEC on their use of conflict minerals (gold, tin, tantalum and tungsten). The SEC’s regulation went into effect in 2014 and there is mounting evidence this regulation is costly, if not impossible, to comply with. In addition, it has not only failed to achieve its stated purpose—to reduce violence in the Democratic Republic of the Congo (DRC)—but also has actually harmed DRC residents. The SEC has suspended enforcement of a portion of this rule, but Congress must fully repeal it.
The Metals Service Center Institute supports legislative efforts that would ensure executive branch agencies have fully considered the costs and benefits of all new substantial regulations. MSCI also supports reforms to “sue and settle” process, by which interest sue the federal government compelling its agencies to write and implement costly new regulations.