Apr 21st 2017 | Posted in Mary Scott Nabers' Insights by Mary Scott Nabers

When President Donald Trump asked industry stakeholders for input regarding regulatory relief as part of presidential initiatives such as his proposed $1 trillion infrastructure plan, he got an earful.

From the U.S. Chamber of Commerce to the National Association of Manufacturers, everyone had something to say about regulations and how permitting processes could be streamlined.

The Associated General Contractors (AGC) of America, in particular, took aim at federal agency regulations and policies that drag down the construction industry. Its more than 50-page Make Federal Agencies Responsible Again plan addresses overreaching federal rules and regulations that it says are preventing economic growth and threatening the country’s reputation as an “economic and cultural superpower” on the world stage. The organization represents more than 26,000 member firms in the construction industry and it wants to implement “a paradigm shift” that will facilitate collaboration between public and private sector partners as friends rather than adversaries.

Here’s a question to ponder.  Does American industry have reason to complain? AGC officials blame decades of federal regulatory failures for construction contractors’ inability to hire new employees, remain competitive and to update and help rebuild the nation’s infrastructure. The regulatory restrictions, they say, create barriers that are harmful for industry, for American taxpayers and for the nation’s infrastructure and economy. They may be right!

Consider these facts AGC cites from recent studies…

In 2015, the cost of federal regulatory compliance topped out at $1.885 trillion, more than the Internal Revenue Service will collect in corporate and individual income taxes for that same year.

Approval for infrastructure projects, on average, takes six years. These types of delays on long overdue projects such as roads and bridges, locks and dams, drinking and wastewater treatment facilities and power plants and transmission lines have cost taxpayers $3.7 trillion. And, federal regulatory costs collected on businesses since 2008 have totaled $808 billion.

It should be noted that federal construction industry regulators have no experience in construction.  They have never been responsible for building roads, bridges or any type of infrastructure project.  Why would construction regulators not be required to have a working knowledge and understanding of the industry they regulate? Without that understanding, a certain level of distrust builds between the industry and regulators.

AGC is not alone in its quest to trim a few branches off the federal regulatory tree. Industry groups say that regulatory restraints are so burdensome they impede commercial endeavors that would help stimulate the nation’s economy. Noting that a highway construction project can be so hamstrung by federal approval processes, the project can take 10-20 additional years to complete.

Trump has pledged to speed up the process and examine rules and regulations that will separate the necessary from the unnecessary. He has vowed to trim the permit process to completion within a year and require contractors to begin a project within 90 days of its approval.

U.S. Chamber officials say American businesses have been crippled by regulations, to the tune of costing them more than $70 billion per year over the last eight years. They are hopeful that the Trump administration will eliminate some rules and regulations. The regulatory processes often stymie competition because some companies simply will not tolerate the bureaucracy. That results in higher prices – with the invoice being laid at the feet of taxpayers.

The president has ordered members of his Cabinet to meet with business and industry to discuss these concerns. Both industry leaders and taxpayers are watching to see what happens … there is much at stake.

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Mary Scott Nabers

As President and CEO of Strategic Partnerships, Inc., Mary Scott Nabers has decades of experience working in the public-private sector. A well-recognized expert in the P3 and government contracting fields, she is often asked to share her industry insights with top publications and through professional speaking engagements.