Dealing With the Regulatory State

According to many sources, the most important of which is the regulatory agency’s own numbers, Obama era regulations cost the American economy over $100 billion annually, perhaps more.  The key culprits in this area are Obamacare, EPA regulations, Frank-Dodd, FCC rules, and FDA regulations.

One understands that some regulation is necessary to (1) address real problems and concerns and (2) insure accountability in the expenditure of tax dollars.  But, most regulation is knee-jerk and actually counterproductive.  As with any bureaucracy, there are always unintended consequences.

Conservatism moves slowly by nature.  But, regulations adopted by federal agencies do not.  Part of the problem is Congress when they write these laws and granting too much discretionary power to the regulatory agencies involved.  Although there is oversight and advice/consent in many cases, once in office the appointed act as a super-legislature when promulgating rules and regulations.  There is supposed to be a check on wanton agency actions- the Administrative Procedures Act- a 70 year old law that requires a period of public comment on proposals.  That is all well and good, but an agency will usually tinker based on those comments, but more likely just go through the motions of the comment period.

Given the cost to the economy and regulations that affect every facet of daily life for Americans, the APA is not enough.  All agencies are responsible for doing a cost/benefit analysis when proposing regulations.  But, studies and investigations have shown, for example, at the EPA these analyses often (1) lacked important information, (2) did not always include the actual costs to consumers, and (3) used estimates based on out-of-date data, sometimes 20 years old.

Another prime example is the Nuclear Regulatory Commission.  Nuclear technology has advanced tremendously since the first commercial reactor went online, yet many of the regulations date back to the 1960’s.

There is a way to deal with this burden on the economy.  The first is for Congress to show some spine and start reigning in these rogue agencies and the proliferation of regulations developed and enacted by un-elected officials.  They must be as specific as possible when granting agencies power to make regulations.

Secondly, any regulation should never be open-ended.  The APA can be amended to make sure that after a regulation is proposed, commented upon and put into effect that the agency revisits the cost and impact of the regulation at regular intervals.  One good suggestion is that after two years a regulation must be reconsidered and it’s costs and benefits analyzed followed by modification of the regulation, or it’s rescission.

Further, any proposed regulation that is estimated to cost the economy $10 billion or more should be codified by Congress in a fast-track manner.  In the Senate, that means eliminating the 60-vote threshold and voting on the regulation after limited debate.  Instead of politicians coming back three years later and saying they oppose something, their vote would be on the record.  If there is any discrepancy in the costs, then just use the average.  In this manner, the regulatory agency acts like an advisory board to Congress and it makes the agency and Congress more accountable and the entire process more transparent.  One can almost guarantee that agencies would be less inclined to flex their regulatory muscles if Congress was involved directly.

The GOP should also endorse a regulation review commission to deal with outdated, redundant, overlapping and obsolete regulations.  This can be done along the lines of the military base closing and realignment commission that dealt with that issue.  This commission would simply review every regulation on the books (a lot of them) and suggest rescission of regulations department by department, agency by agency to Congress who would then modify the suggestions and vote on them as a package.

These regulations can either be immediately rescinded, or “sunsetted” within a proscribed period of time.  During this transitional period, there would be an effective moratorium on the issuance of any new regulations.

It is also important to note that many agencies get around the APA by not issuing regulations per se, but “guidance letters” which are de facto regulations.  This practice would also cease under this scenario.

Many federal regulations are redundant with state regulations.  For example, many regulations under OSHA are also on the books in many states.  In some cases, the state regulations exceed those of the federal government.  Where these examples exist, then state law should take priority, especially in the minute areas of regulation.  The distance between the rungs on a ladder at a work site or whether one must wear a hard hat should not be the concern of the federal government.   Some states will be more lenient than others, but they would bear the financial and political ramifications, not the federal government.  Besides, most OSHA regulations are reactive rather than preventive and proactive.

Given the importance of this issue and it’s impact on the national economy, it become obvious that Congress has ceded too much power to regulatory agencies and it is high time they regain some of that power.  They have failed in not only their oversight functions, but also in the most important power at their disposal- that of the purse.

Think tanks like the Heritage Foundation and others are great at pointing out costs and arguing for the rescission of particular regulations.  But they remain a pipe dream until Congress actually does something.  By the establishment of a regulation review commission, they can start to actually address the issue instead of talking about it for political points.  It should also be noted, with less regulations, enforcement of those that remain would be greater and the bureaucracy could be decreased dramatically.