Congress will set a budget each year that limits what regulations can cost American businesses if the National Regulatory Budget Act of 2014, a bill introduced in Congress this week by U.S. Senator Marco Rubio (R-Fla.) passes.

The bill – all but assured to face a Presidential veto – would establish a new independent agency required to assess and report on the economic costs of existing and new federal regulations. The legislation would also authorize Congress to set a regulatory budget cap for federal agencies, penalizing those that exceed it with a half-a-percent budget cut in the forthcoming fiscal year.

“The federal government should be spelling out just how much regulations cost our economy, and then put itself on a regulatory diet,” Rubio, a long-rumored residential hopeful, said in a statement.

The bill calls for the creation of a new independent agency, overseen by a director nominated by the President for a four year term, that will provide an annual analysis of federal rules and their estimated economic costs for the upcoming year, presented in dollar amounts. All new regulations must undergo this review before they are implemented. Public disclosure is required for all methodologies and data used to generate estimates in the resulting “Annual Report on National Regulatory Costs.”

Using that report as a guide, Congress would set a "national regulatory budget, establishing a cap on the total economic cost of regulations that can be implemented and enforced by the federal government. Legislators would also impose a separate and specific regulatory cost cap for each executive branch agency. Rules that exceed this limit will be unenforceable.  

If enacted in the current Congress, the first National Regulatory Budget would be required in Fiscal Year 2016. The proposed legislation has been endorsed by the several conservative groups, including the Competitive Enterprise Institute, National Small Business Association, and Center for Freedom and Prosperity.

Rubio's legislation is the latest in a string of bills aimed at easing the regulatory burden on companies.Earlier this month, with a 51-5 vote, the House Financial Services Committee recommended exempting smaller public companies from the requirement of the Securities and Exchange Commission to submit financial statements formatted in XBRL. The Small Company Disclosure Simplification Act would allow emerging growth companies and other public companies with revenues of less than $250 million to ignore the XBRL filing requirement for five years, or until the SEC can demonstrate that the costs are commensurate with the benefits.

Last month, the House of Representatives also passed a bill to “create a more open and transparent regulatory process” by requiring the White House's Office of Information and Regulatory Affairs to publish information about pending regulations and related cost-benefit studies online. It would also require federal agencies to update regulatory agendas on a monthly basis. Updates, to be published online, must include a summary of all pending rules, its objective and legal basis, a schedule for completion, as well as cost and economic impact information. 

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