Our specific objectives were to describe (1) what selected businesses and federal agencies believed were the federal regulations that applied to those businesses, (2) what those businesses believed was the impact (cost and other) of those regulations, and (3) the regulations those businesses said were most problematic to them and relevant federal agencies’ responses to those concerns. GEMI’s board of directors declined to participate but did not provide a reason. Specifically, we asked each company for information on (1) the aggregate list of regulations with which the company must comply, (2) the aggregate impact (cost and other) of all of those regulations on the company, (3) the regulations the company viewed as most problematic, (4) what the company believed government and businesses could do to correct or mitigate those problematic regulations, and (5) what the company viewed as the benefits of federal regulations. Although all 15 of the companies participating in the review identified at least some regulations that they believed were applicable to their organizations, none of the companies provided us with a complete list of applicable federal regulations. However, several of the agencies we contacted said they could not make that determination without expending a substantial amount of their limited resources. For example, the companies found it difficult to distinguish federal regulatory requirements from those of other governmental jurisdictions and from their normal business practices. However, they do suggest that serious conceptual and methodological questions need to be raised and answered before studies that attempt to measure total current regulatory costs are used to guide public policy. Similarly, a number of concerns involved both paperwork issues and regulatory costs. In response to these concerns, the agencies most frequently said that the companies had overstated regulatory compliance costs. Conclusions

The 15 participating companies provided us with a lengthy and varied list of regulatory concerns, the most common of which involved the cost of regulatory compliance. Many of the regulatory agencies indicated that they were aware of the companies’ concerns and, in a number of cases, the agencies said that they were taking or had already taken action to alleviate the problems. None could provide comprehensive data on the incremental costs of regulations. First, we believe that comprehensive, empirically based data about the cost of federal regulations to individual businesses do not readily exist and could not be developed without a great deal of time and effort on the part of both the regulators and the regulated community.
Why GAO Did This Study

Pursuant to congressional requests, GAO reviewed the cumulative impact of federal regulations on a limited number of businesses, focusing on: (1) what selected businesses and federal agencies believed were the federal regulations that applied to those businesses; (2) what those businesses believed were the cost and other impacts of those regulations; and (3) the regulations those businesses said were most problematic to them and relevant federal agencies' responses to those concerns.

What GAO Found

GAO found that: (1) most of the businesses contacted declined to participate in the study; (2) none of the 15 participating companies developed a complete list of regulations that were applicable to them or provided comprehensive data on the cost of regulatory compliance; (3) time and resource constraints and the difficulty of disentangling federal regulatory requirements from those of other jurisdictions and other nonregulatory procedures proved to be major obstacles for the companies; (4) most federal regulatory agencies said that they could not detail which regulations applied to a particular company without a great deal of company-specific information and the expenditure of a substantial amount of resources; (5) measuring the incremental impact of all federal regulations on individual companies is extremely difficult and, therefore, decisionmakers need to be aware of the conceptual and methodological underpinnings of studies that attempt to measure total current regulatory costs; (6) many of the 15 participating companies recognized that regulations provide benefits to society and their own businesses, but all of them provided GAO with a varied list of concerns about regulatory costs and the regulatory process; (7) these concerns included perceptions of high compliance costs, unreasonable, unclear, and inflexible demands, excessive paperwork, and a tendency of regulators to focus on deficiencies; (8) the agencies responsible for the regulations the companies viewed as problematic often said that the companies misinterpreted regulatory requirements; (9) the agencies and some congressional members do not always agree on the extent to which problematic regulations are statutorily driven; and (10) the agencies said that they were aware of and were responding to a number of the companies' concerns.