Congress should streamline regulatory compliance procedures for companies.

The length of time and amount of money businesses must spend navigating the complex regulatory permitting process is a serious disincentive to invest in traded sector industries in the United States. The Department of Commerce should establish a one-stop shop to help companies navigate the complex U.S. regulatory framework and expedite the permitting process. It should also develop an online “Turbo Regulation” application that allows companies to complete the required “paperwork” in an easy to fill out Web form over the Internet.

Require Congressional approval of “economically significant regulation.”

Business regulatory compliance costs U.S. businesses tens of billions of dollars annually. To help address this, the Administration should increase industry’s participation in the federal rule-making process, which would likely help reduce the complexity of regulatory compliance, emphasize cost/benefit analysis, and restrict the executive branch’s impulse to “legislate by regulation.” Moreover, Congress should consider passing the “Regulations from the Executive in Need of Scrutiny” (REINS) Act, which would require both houses of Congress to affirmatively approve, and the President to sign, any “economically significant regulation,” defined as any administrative rule with a projected impact to the U.S. economy exceeding $100 million, before it becomes law.

Require the Office of Information and Regulatory Affairs (OIRA) to incorporate a “competitiveness screen” in its review of federal regulations.

In an era when global trade was minimal and the dominance of U.S. competitiveness was largely assured, the nation could afford to impose new regulatory requirements with little thought given to their impact on the competitiveness of traded sectors. But today, regulation can and does increase costs on industries in traded sectors that in turn make them less competitive globally. To the extent federal regulation makes distinctions between companies, it’s often on the basis of size, but it should rather be on whether a firm is in an industry facing global competition or not. To address this, regulatory agencies seeking to impose regulations that affect traded sectors in non-trivial ways should be required to have these regulations undergo a review by OMB’s OIRA for their first-order competitiveness impact. Moreover, given the limited amount of time and attention available for regulatory review, the highest priority should be placed on reviewing those regulations that directly impact traded sectors.

The White House should create an Office of Innovation Review in OMB (i.e., an Office of Information and Regulatory Affairs for Innovation).

All too often federal agencies propose regulations with little consideration given to their effect on innovation. To remedy this, Congress should create within the Office of Management and Budget (OMB) an Office of Innovation Review (OIR) that would have the specific mission of being the “innovation champion” within these processes. OIR would have authority to push agencies to either affirmatively promote innovation or achieve a particular regulatory objective in a manner least damaging to innovation. It would be authorized both to propose new agency action and to respond to existing agency action. OIR would add an important new voice to the regulatory conversation. First, there would now be an entity speaking clearly and forthrightly on the centrality of innovation. Second, and more importantly, OIR would have more than just a voice; it would be able to remand agency actions that harm innovation. It would also propose regulation that benefits innovation as part of its mission. But OIR would not be designed to thwart federal regulation; as a matter of fact, in some cases, the existence of OIR might lead to increased federal regulation (e.g., more Environmental Protection Agency regulations might pass muster under cost-benefit analysis if innovation-related effects were calculated).

Congress should amend countervailing duty law so that unfair currency manipulation will be taken into consideration when calculating countervailing duties.

Market forces, not government intervention, should set currency markets, yet too many nations—led by China—manipulate their currencies to achieve competitive advantage. To address this, Congress and the President should sign legislation that would require retaliatory tariffs on nations found to have misaligned currency. Further, Congress should amend countervailing duty law so that unfair currency manipulation will be taken into consideration when calculating countervailing duties

Congress should review export control policies that inhibit U.S. exports.

While the Obama Administration’s Export Control Reform Initiative has begun the effort to implement common sense reforms to streamline and improve the nation’s export control system, more needs to be done. In particular, the government should remove outdated U.S. export control restrictions, especially unilateral burdens placed on widely available ICT products or software. For instance, the United States could remove performance-based controls on commercial scalar computers and associated technology, because access to computing power is so widely available that U.S. export controls on commercial computers are no longer effective and undermine U.S. technology competitiveness and national security. The United States could also remove encryption controls on products and components that are, or will be, widely available or deployed, do not contain encryption as their primary function, or are not peculiarly responsible for creating a military- or intelligence-related advantage.

Congress should update the charter of the Committee on Foreign Investment in the United States (CFIUS) and provide it more resources to address the realities of modern-age state capitalism.

CFIUS is an inter-agency committee authorized to review transactions that could result in control of a U.S. business by a foreign entity (“covered transactions”), in order to determine the effect of such transactions on the national security of the United States. Current CFIUS regulations state that examiners must review covered transactions on a case-by-case basis. But because the threat to both the U.S. defense industrial base and the U.S. industrial base overall is systemic, the CFIUS charter needs to be updated to address the realities of modern-age state capitalism—particularly the threat from SOEs—by allowing reviewers to assess and gauge systemic threats and examine covered transactions in a broader context. Congress should also increase the time period permitted for an initial CFIUS review and also better equip CFIUS with additional personnel and financial resources to support more thorough reviews.

Congress should authorize the Export-Import (Ex-Im) Bank to provide loan assistance to SMEs and to firms competing against subsidized foreign competitors.

Congress should authorize the Export-Import Bank to go beyond providing export credit financing by leveraging the resources of the Bank to help create domestic manufacturing jobs. In particular, Congress should allow the Bank to use $20 billion in unobligated authority to lend directly to domestic manufacturing companies that are in competition with subsidized foreign competitors (e.g., competitors who receive subsidies in the form of grants, subsidized loans, special tax treatment, beneficial land use, etc.). The loan recipients should be able to demonstrate how the funds would support expanded manufacturing activities and employment in the United States.

Congress should raise the Export-Import Bank’s authorization limit to at least $200 billion.

In May 2012, President Obama signed Congressional legislation that reauthorized the Export-Import Bank (Ex-Im Bank) for three additional years while raising its lending authority by 40 percent to $140 billion by 2014. While this is an important step in the right direction, the reality is that foreign competitors continue to invest substantially more in their countries’ export credit agencies (ECAs) as a share of GDP than the United States does. For example, in 2010, Brazil and China provided ten times more and Germany, France, and India all provided at least seven times more export credit financing to their exporters as a share of GDP than did the United States. To adequately respond to increasing foreign export credit competition, Congress should raise the Ex-Im Bank’s authorization limit to at least $200 billion.

Department of Commerce should include a Data Policy Office to focus on data policies that foster innovation.

It’s not enough for the Obama administration to work to protect people from inappropriate use of data; they should proactively encourage the appropriate use of data, including pushing for policies that increase data sharing and reduce barriers to global information flows. A newly created Data Policy Office should also lead the development of an R&D framework for privacy to ensure that federal research dollars are directed at the most pressing privacy challenges.
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