Category Archives: Spending

Unfunded Mandate Reform in the House

This week, the House is considering a dozen reform bills as part of Stop Government Abuse Week. The centerpiece bill, sponsored by Rep. Virginia Foxx, would add transparency to a shady practice called the unfunded mandate. The bill’s full title is the Unfunded Mandates Information and Transparency Act, or UMITA for short, and it will receive a floor vote today. It is expected to pass.

The goal of UMITA is to add teeth to the dentally-challenged Unfunded Mandate Reform Act of 1995 (UMRA), passed in the excitement of the Republican Revolution during the Clinton years.

Unfunded mandates were a problem back then, and they are an even bigger problem today, due in part to Presidents Bush and Obama’s record-setting deficit spending. Why do large deficits drive unfunded mandates? Suppose the federal government wants to enact a new job-training program. If it runs the program itself, it adds to the deficit, and runs the risk of making voters angry. But if it instead requires state governments or private companies administer and pay for the program, the federal balance sheet is unaffected. Unfunded mandates are a sneaky way to grow government.

The old 1995 UMRA bill made for great press conference fodder, but little else. One reason is that an unfunded mandate has to be very expensive before it triggers any UMRA actions. It would have to cost more than $100 million to state and local governments, so a $99 million unfunded mandate could slip through the cracks. Private sector burdens have to reach $146 million before drawing scrutiny.

If a mandate does reach the thresholds, the Congressional Budget Office (CBO) investigates and discloses its findings to Congress, which then has the option of striking down the mandate.

The trouble is that few unfunded mandates cost that much; their strength is in numbers rather than in size. And Congress rarely strikes down mandates that do meet the threshold for review. UMRA also exempts disaster aid and national security-related spending.

It gets worse. There are more than 60 federal agencies that issue regulations, but UMRA only covers the 17 cabinet-level agencies. The remaining three quarters of the regulatory state, called independent agencies, are exempt from this basic transparency measure.

Enter the new UMITA bill. It would expand UMRA’s disclosure requirements to cover independent agencies. It would also move mandate review from CBO to the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA), which specializes in regulatory review, and is better suited to the task.

UMITA also closes another UMRA loophole. UMRA only applies to rules that enter the rulemaking pipeline via a Notice of Proposed Rulemaking (NPRM) in the Federal Register. If an agency wants to avoid review of an unfunded mandate, all it has to do is avoid that step of the regulatory process. In that sense, UMRA actually reduces transparency. UMITA would fix that by making all rules subject to review, regardless of whether agencies skip the NPRM.

UMITA is not an earth-shaking reform, but it would improve transparency in both government spending and the regulatory process. Wayne Crews and I wrote about UMITA in 2012 here, and The Hill wrote about the bill here.

Downsizing the Federal Government

You may have seen Cato’s excellent Downsizing the Federal Government project. They have just produced a series of quick-hit videos, each just a few minutes long, going over various federal departments’ excesses and offering reforms that would bring them back to earth—or abolish them outright. Each one is well worth watching:

Department of Agriculture

Department of Education

Health and Human Services

Department of Energy

Department of Labor

CEI Podcast for December 5, 2013: Ending Corporate Welfare

corporate welfare
Have a listen here.

Stephen Slivinski, a senior economist at the Goldwater Institute, discusses solutions to the seemingly intractable problem of corporate welfare.

CEI Podcast for October 10, 2013: CEI Files FOIA Requests Over Park Closures

Have a listen here.

During the government shutdown, the National Park Service has barricaded and even closed numerous open-air memorials and parks – including, in some cases, privately owned parks. CEI has filed a series of Freedom of Information Act requests to find out who made the decisions and why. Senior Attorney and Counsel for Special Projects Hans Bader discusses the case.

CEI Podcast for October 3, 2013: The Federal Shutdown

Have a listen here.

For the 17th time since 1976, the federal government has shut down over a partisan fiscal squabble. Vice President for Strategy Iain Murray gives his thoughts on how it happened, what the consequences will be, and what is at stake.

CEI Podcast for September 26, 2013: “The Cupboard Is Bare”

Have a listen here.

On Sunday, House Minority Leader Nancy Pelosi opposed the notion of federal spending cuts, saying that “The cupboard is bare” and “There’s no more cuts to make.” This not actually being the case, Senior Communications Director Brian McNicoll lists off a series of programs and departments that should be removed from the very full federal cupboard.

CEI Podcast for August 1, 2013: Is Washington the Next Detroit?

Have a listen here.

Fellow in Technology and Entrepreneurship Bill Frezza sees parallels between Detroit’s recent bankruptcy and the federal government’s own fiscal problems. Fortunately, he sees a way out.