Smarter Regulation for U.S. Manufacturing
The American free enterprise system has long been one of the greatest engines for prosperity and liberty in the world, and manufacturing — including the forest products industry — is a cornerstone of that success. The forest products industry is of critical importance to the U.S. economy. More than 75 percent of U.S. pulp and paper mills are located in rural counties, and every job in the paper industry supports 3.25 more jobs in supplier industries and local communities. On the wood products side of the industry, each job supports 2.25 more jobs in other parts of the economy.
In addition to facing the challenges of an increasingly competitive global economy, American manufacturing must wrestle with an economy here at home that has become distorted by a patchwork of mandates and incentives imposed by unelected regulators.
U.S. paper and wood products manufacturers have spent billions of dollars on regulatory compliance and are estimated to spend an additional $10 billion in new capital expenditures over the next decade.
Poorly-designed regulations can cause more harm than good, stifle innovation, discourage growth, limit job creation, waste limited resources, undermine sustainable development and, ultimately, erode the public’s confidence in government.
Government leaders must embrace systemic regulatory reform. Regulations should be designed to provide net benefits to the public based on the best available scientific and technical information through a transparent and accountable rulemaking process, with due consideration of the cumulative regulatory burden.
The president and Congress have an historic opportunity to dramatically improve the regulatory process to serve the public interest, promote jobs and increase the competitiveness of the American pulp, paper, packaging and wood products industry. The following policy proposals are intended to help reach that goal:
- Do More Good Than Harm: Congress and the president should ensure that the benefits of regulations justify the costs and that the most cost-effective approach is sought to achieve statutory objectives. (AF&PA supports the “Regulatory Accountability Act,” S. 951, H.R. 5.)
- Sound Science: Regulatory decisions should be based on the best available scientific and technical information. (AF&PA supported the “Secret Science Reform Act of 2015,” S.544; H.R.1030.)
- Transparency: Agencies should disclose data to the public early, outline models and other key information used in high-impact rulemakings and provide an adequate opportunity for meaningful public input. Moreover, court settlements between regulators and interest groups to require rulemakings should be published and disclosed to the public and reviewed by the Office of Information and Regulatory Affairs before going final. (AF&PA supports the House and Senate Sunshine Regulatory Acts, H.R. 469; S. 119.)
- Streamline the Permitting Process: The cumbersome federal permitting process for siting or modernizing facilities or projects must be modernized to be timely, certain and efficient so that beneficial projects can proceed, and jobs can be created. This requires the reform of policies and rules under statutes such as the Clean Air Act.
- Retrospective Review of Rules: There should be an institutionalized, retrospective review to streamline and simplify existing rules and to remove outdated and duplicative rules. The retrospective review process should be the beginning of a bottom-up analysis of how agencies can best accomplish their statutory goals. This should include a careful analysis of regulatory requirements and their necessity, as well as an estimation of their value to achieve needed outcomes. (AF&PA supports the SCRUB Act, H.R. 998.)
- Accountability: The president should direct all regulatory agencies, including the independent agencies, to promptly implement the preceding recommendations. As all regulation starts with the delegation of lawmaking authority from Congress, Congress should elevate these principles into binding law.