Rampant regulatory virus
By Clyde Wayne Crews, Jr.
Copyright 1999 Washington Times
June 1, 1999
However controversial the $1.65 trillion federal budget,
taxpayers know what Washington officially spends
in the congressionally approved budget. That places some measure of
voter
accountability on Congress. But the money the public spends on
Washington's
environmental, safety and economic regulations doesn't appear in
the federal
budget. For these, Congress shrugs off accountability, often
blaming agencies
for excesses.
Regulations are flourishing, and agencies don't mind the
free rein. The 1998
Federal Register's 68,571 pages represent the highest count since
the Carter
presidency and a 6 percent jump over 1997.
Contained within the Federal Register were 4,899 final rules, the
second-highest count since 1984. Seventy of these new rules are
"major," meaning they will cost at least $100 million
each, compared with 60 such high-cost rules the year before.
Having now issued more than 21,000 final rules over the
past five years, the 60
federal departments, agencies and commissions are now at work on
4,560 more.
The Transportation Department and the
Environmental Protection Agency, with 518 and 462 rules,
respectively, lead the pack. Indeed, the five most
active agencies account for 47 percent of all rules under
consideration. Of
the new rules, 937 are expected to affect small businesses, a 37
percent
increase over the past five years.
What does all this regulation cost? Figures from the
Rochester Institute of
Technology's Thomas Hopkins pegs these
regulatory compliance costs at $737 billion. For perspective,
that's 44 percent of the level of federal
spending of $1.65 trillion, 9 percent of GDP, the equal of all U.S.
corporate pretax profits
($734 billion in 1998), and higher than Canada's gross national
product of $542 billion
in 1995. Bringing it home, the average family of four's $36,423
after-tax income in 1997 contained more than $7,000 of hidden
regulatory costs - a 20 percent bite.
Accountability must be brought to this off-budget
regulatory activity, but
relying solely on
regulatory reforms that compel unelected agency personnel to police
themselves
will not suffice. Policing the regulatory state requires (a)
greater official
disclosure of regulatory costs and trends in numbers of rules, and
(b) that
Congress itself be held directly accountable for the costs, and all
the good
and
bad that agency rules inflict.
Make regulation more transparent by publishing score cards
in the federal
budget: Regulations must be made as transparent as possible, but
elegant
cost-benefit data are not necessary to get started. Today,
interested citizens
must comb through the
Unified Agenda of Federal Regulations' 1,000-plus pages of small,
multicolumn
print to accumulate information such as the numbers of major rules
(those
expected to impose costs of $100 million on the public) and minor
rules each agency is at work on; rules
impacting small business; and rules for which
agencies face a congressionally imposed deadline. Needed and
immediately
achievable is the publication of a summary of this and similar
already
available but scattered current and historical data in a
"Regulatory Report Card," with pertinent analysis, as
shown in the accompanying chart.
Two new proposals in
Congress take important steps toward greater regulatory disclosure:
The
Regulatory Right-to-Know Act would require an annual report on
regulatory costs
and benefits and the Mandates Information Act would require
Congress to
acknowledge its intent to impose legislation costing more than $100
million when any member
raises a point of order. Presenting the components of the report
card in the
federal budget or the president's economic report would enhance
these efforts
by explicitly removing the ability of legislators and regulators to
hide what
they are up to. For example, if cost-benefit analysis have not
been performed
for a rule, that in
itself is important information that would be disclosed in a report
card,
helping reveal exactly what we do and do not know about a
regulation's impact.
That would allow simple cross-agency comparisons of effectiveness,
there by
enhancing public accountability.
A simple report card would be difficult to credibly oppose
in the
halls of Congress, and trends in reported data would prove vital to
scholars,
third-party researchers and to Congress itself.
Hold Congress to a standard of
"No regulation without representation!" A regulatory
report card could quickly reveal that Congress itself, rather
than agencies, is the prime mover behind
regulatory growth. The next step is to make Congress directly
answerable to
the voters for the costs and burdens agencies impose on the public.
Far more
than any scheme to merely require agency-driven cost-benefit
analysis, this
reform points the way toward responsibility in regulation.
Agencies
will always face overwhelming incentives to expand their turf and
can never
credibly police themselves.
Rep. J.D. Hayworth, Arizona Republican, and Sen. Sam
Brownback, Kansas
Republican, in their proposed Congressional Responsibility Act have
recognized
that Congress simply delegates too much lawmaking power to
unelected
agencies in the first place, which makes regulatory accountability
to voters
impossible. By requiring that agencies' final rules be approved by
Congress
and signed by the president before they are binding on the public,
they don't
squander effort blaming agencies for emphasizing the very
regulating they were
set up to do in the
first place. They point the finger at Congress, refusing to permit
our elected
representatives to shirk the duty to make the tough calls.
Critics will object that Congress mustn't be bogged down
with approving
regulations. Actually, it is the public that mustn't be bogged
down with a
regulatory torrent if Congress can't
even take the time to nod at it as it passes by. Congress'
approval
responsibilities can be made easier if congressional approval of
new
regulations is given by voice vote rather than by tabulated roll
call, or by
voting on several regulations at once. The
mechanism doesn't matter, but the accountability does.
Accountability, along
with annual disclosure of regulatory trends, points the way to
"No regulation without representation."
Clyde Wayne Crews Jr. is director of competition and
regulation policy at the
Competitive Enterprise Institute.
****BOX
REGULATORY REPORT CARD
A regulatory
report card should include the Number of major and minor rules, all
flagged as
follows, with five-year historical tables:
* Number impacting small business and lower-level
governments.
* Number/percentage featuring numerical, descriptive only,
or no cost estimates.
* Tallies of existing cost estimates, with subtotals
by agencies and a grand total.
* Short explanation of ratio and primary reason for lack of
cost estimates.
* Rules that are deregulatory rather than regulatory.
* Rules that only affect agency procedure.
* Rollover: Which rules are appearing in the Unified Agenda
for the first time?
* Major and minor rules
required by statute.
* Major and minor rules that are discretionary.
* Rules facing statutory or judicial deadlines.
* Rules for which cost calculations are statutorily
prohibited.
* Percentages of rules reviewed at the Office of Management
and Budget and any
action taken.
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