Sounds like writers for The Economist have been reading some of CEI’s regulatory research. From this week’s magazine:
Two forces make American laws too complex. One is hubris. Many lawmakers seem to believe that they can lay down rules to govern every eventuality. Examples range from the merely annoying (eg, a proposed code for nurseries in Colorado that specifies how many crayons each box must contain) to the delusional (eg, the conceit of Dodd-Frank that you can anticipate and ban every nasty trick financiers will dream up in the future). Far from preventing abuses, complexity creates loopholes that the shrewd can abuse with impunity.
The other force that makes American laws complex is lobbying. The government’s drive to micromanage so many activities creates a huge incentive for interest groups to push for special favours. When a bill is hundreds of pages long, it is not hard for congressmen to slip in clauses that benefit their chums and campaign donors. The health-care bill included tons of favours for the pushy. Congress’s last, failed attempt to regulate greenhouse gases was even worse.
There are lots of ways to simplify the 165,000-page Code of Federal Regulations. All new rules should have automatic 5-year sunsets, renewable by a Congressional vote. An annual bipartisan commission should comb through the books and create a package of obsolete or harmful rules for Congress to repeal. Congress should vote on all “economically significant” regulations, a la the REINS Act.
The list goes on. The sooner Congress and the President get cracking on enacting these reforms, the better off the economy — and unemployment numbers — will be.
Have a listen here.
The REINS Act would require Congress to vote on all economically significant regulations — rules that cost at least $100 million per year. The House passed the bill yesterday, and now it moves on to the Senate. Vice President for Policy Wayne Crews talks about the impact REINS could have on increasing transparency and accountability. He also offers up a few more ideas for further regulatory reform.
Congress and the White House have typically been reluctant to repeal any laws or regulations, regardless of which party is in power. The solution? Change the institutional rules of the game to give them an incentive to repeal laws. CEI Research Associate Jacque Otto and I expound on that idea in The American Spectator.
One reform would be a Repeal Amendment to the Constitution. That would give states a veto power over federal laws if two thirds of them vote for repeal. Georgetown law professor Randy Barnett has already drafted some language:
Any provision of law or regulation of the United States may be repealed by the several states, and such repeal shall be effective when the legislatures of two-thirds of the several states approve resolutions for this purpose that particularly describe the same provision or provisions of law or regulation to be repealed.
We have other ideas:
Short of that, the House and Senate could establish repeal committees. These committees would be unable to pass laws and regulations, only to repeal them. Its members would be ineligible to sit on other committees. The only accomplishments they would be able to tout to voters would be how much they lighten Washington’s heavy hand.
Another option is to add an automatic sunset provision to all new regulations — meaning that they would expire after, say, five years unless specifically reauthorized by Congress. This kind of regulatory expiration date would ensure that only the truly necessary ones stay in the books.
Read the whole thing here.
Usually, “bipartisan” means “twice as stupid.” But for real regulatory reform to happen, both parties need to be involved. President Obama’s recent executive orders requiring agencies to comb their books and repeal unneeded regulations should save a few billion dollars. But that’s just a drop in a $1.7 trillion bucket. Over at Fox Forum, I explain one bipartisan idea that could potentially save much more:
Agencies cannot be trusted to clean out their own books because they have no incentive to. Agency administrators want to maximize their
missions and budgets. Having them police themselves will not yield real savings.
There is a relatively easy fix: get independent outsiders with no stake in the outcome go through the Code of Federal Regulations make the
repeal recommendations. President Obama should appoint a bipartisan repeal commission to do just that and then send its package of repeal
proposals to Congress.
Congress, worried about backlash from interest groups with vested interests in existing rules, would have every incentive to water down
the package. To avoid that, Congress should impose on itself a requirement to have a straight up-or-down vote on the package within a
short time-say, 10 legislative days-with no amendments allowed.
Read the whole thing here.
President Obama has issued two executive orders this year directing agencies to comb through their books and repeal unneeded or harmful rules. The first one repealed about 30 rules, and will save about $1.5 billion.
It will be about four months before the second rule’s savings become known. My hunch is it will be in the same ballpark as the first executive order.
In this short article and accompanying radio segment (see the upper right hand side for the audio), I put the executive orders in context and put forward an idea that would save even more money.
Spending, deficits, and taxes are getting all the attention from reformers in both parties. In today’s Investor’s Business Daily, Wayne Crews and I argue that regulation is not to be forgotten:
Regulations cost the average business $8,086 per employee per year. Small businesses are especially hard-hit. Firms with fewer than 20 employees pay $10,585 per employee per year for regulatory compliance, according to the Crains’ report. When hiring employees becomes more expensive, fewer get hired. No wonder unemployment is so persistent.
We also offer up some reform ideas:
One reform is to purge the books of obsolete and clearly harmful rules. There is no need for Washington to have rules still on the books for a Y2K crisis that never even materialized. Nor is there any need for it to regulate the size of holes in Swiss cheese, which it does in great detail.
President Obama should appoint an annual bipartisan commission to comb through the Code of Federal Regulations and recommend rules for elimination. Congress would then be required to vote up-or-down on the package without amendment.
Read the article here; for more intellectual ammunition, see the just-released 2011 edition of Wayne’s “Ten Thousand Commandments” study.
Wayne Crews and I have a piece in today’s Sacramento Bee summarizing the main findings of Wayne’s “Ten Thousand Commandments” study. We also point out that regulatory costs are not limited to the $1.75 trillion it takes to comply with them:
The total cost of federal regulation is $1.75 trillion. That’s true in terms of money. But money isn’t everything. Regulation also has opportunity costs. Workers spend millions of man-hours every year filling out forms and following procedures. That time could be spent on other things instead, such as finding ways to lower costs, improve quality and increase worker productivity. When there’s too much regulation, progress and innovation slow down.
There is a second opportunity cost that is often overlooked. Companies don’t sit idly by when regulators propose new rules. They try to influence the process. Most companies, especially larger ones, often favor new regulations in their industries. They will pay lobbyists a lot of money to influence the rules in a favorable way – say, by handicapping a competitor.