Governors Call for Reform

Published April 1, 1998

At its annual winter meeting in Washington, the National Governors’ Association (NGA) on February 22 overwhelmingly approved a resolution urging Congress “to immediately pass regulatory reform legislation that would require federal regulatory agencies to consider risks, costs, and benefits while formulating federal regulations.”

Passage of the strongly worded resolution left little doubt that the nation’s governors–three years after enactment of the Unfunded Mandates Reform Act of 1995–are still quite displeased with the current regulatory structure and want Congress to do something about it.

The NGA resolution noted that any federal regulatory reform law should “ensure that future regulations with substantial potential costs and benefits are subject to risk assessment and comparative risk assessment.” “With respect to proposed regulations,” the resolution continued, “federal agencies should be required to consider the full scope of qualitative and quantitative costs and benefits, exercise sound judgement, use realistic assumptions, weigh all reasonable alternatives, and strike an appropriate balance between costs and benefits.”

“Judiciary review of an agency’s decision should be based on the ‘arbitrary and capricious’ standard,” the resolution continues. “Failure to perform any risk assessment, risk comparison, or cost-benefit analysis should be treated as a rebuttable presumption that the final regulation issued by that agency is arbitrary and capricious.”

Turning their attention to the growing tensions between federal and state regulatory agencies, the governors called on Washington to pay attention to both the needs and the achievements of the states. “Federal agencies should support effective state regulatory reform initiatives and allow flexibility so that states may pursue regulatory innovations,” the NGA said. “Federal agencies should consider emulating creative and flexible state approaches that maximize overall risk reduction while minimizing economic costs and bureaucracy.”

“Adoption of federal regulatory reform would promote reasoned analysis and informed decision-making among policy-makers so they can address priority risks while maximizing the use of limited societal resources,” the NGA resolution observed. Noting that regulatory reform would improve the efficiency of government, the NGA resolution concluded by saying that such a step would also minimize “unnecessary burdens to communities and stakeholders affected by federal regulations.”