Congress is bristling with activity aimed at bringing much-needed accountability and transparency to the nation's suffocating regulatory apparatus. While Washington bureaucrats may not like the increased public scrutiny headed their way, the people who pay the regulators' salaries will welcome the change.
The Congressional push for regulatory relief got underway in February when the House, by a vote of 274-149, passed the Mandates Information Act of 1999, H.R. 350, sponsored by Reps. Gary Condit, D-Cal., and Rob Portman, R-Ohio. Their bill targets "hidden taxes," the costs imposed on consumers and businesses as a result of federal mandates.
It requires any legislation imposing private-sector costs of $100 million or more to be subject to a point of order in Congress, with a 20-minute debate to be followed by a vote to strike the mandate. Eliminating the costly mandate would require a simple majority vote.
"Hidden mandates are an unfair tax on American consumers. It's just basic common sense for Congress to know the costs of legislation," says Rep. David Dreier, R-Cal.
The bill forces Congress to look before it leaps and, with its up-or-down vote, keeps lawmakers accountable for the burdens they place on the rest of society. Backing the bill is an impressive array of organizations, including the National Governors' Association, U.S. Conference of Mayors, National League of Cities, and the National Conference of State Legislatures.
After declaring war on hidden taxes, the House set its sights on the reams of paperwork Washington bureaucrats dump on unsuspecting small businesses. Twenty-fours hours after the Condit-Portman bill sailed through the House, lawmakers approved, by a vote of 274 to 151, the Small Business Paperwork Amendments Act of 1999, H.R. 391, sponsored by Rep. David McIntosh, R-Ind.
McIntosh's bill amends the Paperwork Reduction Act of 1995, which called for a 20% reduction in federal paperwork burdens over four years.
Yet despite the 1995 law's noble intentions, paperwork actually increased by 2.3% in 1997 and 1% in 1998, according to the White House Office of Management & Budget. Americans spent an incredible 7 billion hours filling out paperwork in 1998 at a cost of $229 billion, the OMB reported.
Unlike large corporations, most of America's 22 million small businesses lack the legal expertise that can keep them from making mistakes when filling out the mountains of paperwork thrust upon them. Fines for such errors can be stiff, forcing many small businesses into bankruptcy. The McIntosh bill offers overburdened small businesses relief by, among other things:
Waiving civil fines for minor, first-time paperwork violations if the small businesses correct the infractions within six months.
Requiring federal agencies to create a hotline for small businesses that need answers and guidance when filling out federal paperwork.
Establishing a task force to study the feasibility of streamlining reporting requirements for small businesses.
The McIntosh bill won't hinder law enforcement or civil fines. Congress has no interest in impeding the prosecution of criminal activity, including drug crimes, IRS violations or threats to the environment, health, and safety.
Things are also stirring in the Senate. Legislation introduced by Sens. Fred Thompson, R-Tenn., and John Breaux, D-La., helps the public assess the costs and benefits of regulations originating in Washington.
Their Regulatory Right-to-Know Act, S. 59, requires the OMB to issue an annual regulatory accounting report showing the costs and benefits of federal regulatory actions.
In addition, the OMB would be instructed to issue an analysis of the impacts of regulations on federal, state, local, and tribal governments, the private sector, small businesses, and the nation's economic growth. The bill also requires OMB to make recommendations for reforming wasteful or outdated regulations.
Sen. Thompson has also teamed up with Sen. Carl Levin, D-Mich., in introducing the Regulatory Improvement Act of 1999. Public accountability also is the focus of this legislation.
Under the bill, federal agencies are required to perform a cost-benefit analysis when issuing rules costing $100 million or more, or that are otherwise deemed to have a significant impact. Among other things, the regulatory agency must determine whether the benefits of the rule justify the costs; whether the rule is more cost-effective, or provides greater net benefits than other regulatory options considered by the agency; and whether the rule adopts a flexible regulatory option.
Is the nation on the verge of regulatory reform? Maybe. The White House has agreed to sign the Levin-Thompson bill requiring agencies to show that the benefits of their actions are worth the costs. And for the moment it is withholding judgement on the Regulatory Right-to-Know Act.
On the other hand, the administration has threatened to veto the bills aimed at exposing hidden taxes and cutting paperwork, even though they, too, have broad bipartisan support.
Though these bills are too modest to pose a lethal threat to Washington's Leviathan-like regulatory structure, they are a reflection of growing concern in both parties over how red tape is harming American businesses. Reform has to begin somewhere, and Congress appears ready to take the first steps.
Bonner R. Cohen is senior fellow at the Lexington Institute, Arlington, Va.
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