Regulation and Competitiveness of U.S. Businesses: Is It Time for a Competitive Impact Statement?

This report addresses the question of whether there is a need for a Competitiveness Impact Statement (CIS) attached to proposed legislation in the U.S. A review of the literature on the cost of complying with federal regulations for U.S. businesses, and its effect on U.S. competitiveness, concludes that the lack of reliable data at the industry level leads to contradictory results. The report includes a history of executive and Congressional oversight of federal regulations from the Nixon through Clinton administrations, and a comparison with the European experience. Among the report's findings: in 2004 the total cost of federal regulation for U.S. businesses was $648 billion, and the cost per employee was $5,633, a 4.1 percent increase over 2000. Most studies of the cost of compliance with environmental regulations show no serious effect on industrial competitiveness, but studies do not account for the cost of other types of federal regulations. The authors call for better data collection in order to support the comparison of the cost of regulation across industries and across countries.