Understanding the nature and extent of the growth of the federal regulatory state is vital to sound policymaking. Taking that to heart, over the last decade the Heritage Foundation has issued a series of reports measuring trends in federal regulatory activity. On May 11 of this year, Heritage released its most recent regulatory study, “Red Tape Rising: Six Years of Escalating Regulation Under Obama” (RTP). RTP, as the title suggests, paints a grim picture of rapidly escalating federal regulation unmoored from sound cost-benefit analysis – regulatory policy that is detrimental to American economic health. Fortunately, RTP also suggests potential prescriptions to tame the federal regulatory virus. You should read the entire study, but a few key excerpts from RTP, highlighted below, merit particular attention:
“The number and cost of government regulations continued to climb in 2014, intensifying Washington’s control over the economy and Americans’ lives. The addition of 27 new major rules last year pushed the tally for the Obama Administration’s first six years to 184, with scores of other rules in the pipeline. The cost of just these 184 rules is estimated by regulators to be nearly $80 billion annually, although the actual cost of this massive expansion of the administrative state is obscured by the large number of rules for which costs have not been fully quantified. Absent substantial reform, economic growth and individual freedom will continue to suffer.”
“President Barack Obama has repeatedly demonstrated his willingness to act by regulatory fiat instead of executing laws as passed by Congress. But regulatory overreach by the executive branch is only part of the problem. A great deal of the excessive regulation in the past six years is the result of Congress granting broad powers to agencies through passage of vast and vaguely worded legislation. The misnamed Affordable Care Act and the Dodd–Frank financial-regulation law top the list.”
“Many more regulations are on the way, with another 126 economically significant rules on the Administration’s agenda, such as directives to farmers for growing and harvesting fruits and vegetables; strict limits on credit access for service members; and, yet another redesign of light bulbs.”
“In many respects, the need for reform of the regulatory system has never been greater. The White House, Congress, and federal agencies routinely ignore regulatory costs, exaggerate benefits, and breach legislative and constitutional boundaries. They also increasingly dictate lifestyle choices rather than focusing on public health and safety.”
“Immediate reforms should include requiring legislation to undergo an analysis of regulatory impacts before a floor vote in Congress, and requiring every major regulation to obtain congressional approval before taking effect. Sunset deadlines should be set in law for all major rules, and independent agencies should be subject—as are executive branch agencies—to the White House regulatory review process.”
In light of its findings, RTP makes eight specific recommendations:
- Require congressional approval of new major regulations issued by agencies.
- Require regulatory impact assessments of proposed legislation.
- Establish a sunset date for regulations.
- Subject “independent” agencies to executive branch regulatory review.
- Codify stricter information-quality standards for rulemaking.
- Reform “sue and settle” practices (under which regulators work in concert with advocacy groups to produce settlements to lawsuits that result in greater regulation).
- Increase professional staff levels within the Office of Information and Regulatory Affairs (OIRA) (the small White House agency charged with reviewing proposed regulations).
- Codify the requirement now imposed by Executive Order 12866 mandating agencies to assess the costs and benefits of proposed rules and to consider alternatives.
These excellent recommendations merit serious consideration by federal policymakers.