By Geof Koss and Niels Lesniewski
June 9, 2011

The Senate on Thursday rejected a proposal that would have imposed new economic review requirements on federal agencies, signaling the uphill fight awaiting similar regulatory overhauls under consideration in the House.

The amendment, offered to an economic development bill (S 782), was defeated, 53-46. Under an earlier agreement, 60 votes were needed for adoption.

Based on legislation (S 1030) by Maine Republican Olympia J. Snowe, the measure included a number of provisions intended to ease the effect of federal regulations on small businesses.

Citing the lagging economy, Snowe on Thursday called it “absolutely vital that the federal government considers the small business economic impact of the rules and regulations that the agencies are promulgating.”

Specifically, the amendment would have overhauled federal law (PL 96-354) dealing with small business regulation to require agencies to consider “indirect impacts” of the effects of regulations on small businesses. The measure also would have allowed companies to challenge proposed regulations in court, while imposing new periodic review requirements of regulations on agencies.

Additionally, it would have imposed new requirements for input by small businesses on EPA and the Occupational Safety and Health Administration, while also requiring each agency to consider the effects of non-binding guidance documents on small firms.

Senate Environment and Public Works Chairwoman Barbara Boxer, D-Calif., said she feared the “far-reaching” amendment would allow outside groups to challenge health benefit estimates of air quality regulations.

In a letter to senators ahead of the vote, the Coalition for Sensible Safeguards, a consumer advocacy group, said the amendment “would impose severe burdens on federal agencies, needlessly waste limited agency resources, result in unnecessary American illnesses, injuries, and deaths, and cost the economy billions of dollars.”

The vote comes as House Republicans are preparing to advance a suite of sweeping regulatory overhauls. Legislation (HR 527) offered by House Judiciary Chairman Lamar Smith, R-Texas, contains regulatory “lookback” provisions similar to those in Snowe’s bill. It also would require agencies to weigh the indirect effects of regulations on small businesses — a requirement criticized by Democrats at a hearing on the measure earlier this year.

A bill (HR 1705) expected to be marked up by a House subcommittee in the coming weeks would establish a new federal interagency committee to conduct cost-benefit analyses of numerous EPA air quality rules. Legislation (S 609) by Sen. James M. Inhofe, R-Okla., that would establish a similar panel also has been filed as an amendment to the Senate economic development bill.

The House in the coming weeks is expected to take up a bill (HR 10) that would require congressional approval of all regulations with an estimated annual economic impact of $100 million or more.

A Senate companion measure (S 299) currently has 27 sponsors.