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New #NeverNeeded Paper: Regulatory Reform

Regulatory reform is one of the most important policy responses to the COVID-19 crisis. In the short run, removing obstacles to health care can save lives. Removing barriers against remote education, telecommuting, and gig jobs can help people make ends meet during a lockdown with double-digit unemployment. But getting rid of this or that #NeverNeeded regulation is not enough. Policy makers need to reform the rulemaking process that continues to generate all these bad rules.

In a new paper, I outline two such reforms. One addresses the large stock of existing regulations. The other addresses the ongoing flow of new rules.

To address the stock of regulations, Congress and the president should create an independent Regulatory Reduction Commission to go through the 185,000-page Code of Federal Regulations (CFR) and annually send to Congress an omnibus package of rules to repeal. The paper contains suggestions for how to tackle the CFR in manageable chunks over a 10-year cycle, how to structure the commission’s membership so neither party can stack it, how to prevent Congress from stalling or watering down the package, and more.

That will reduce the stock of existing regulations to a more reasonable level. To keep regulatory sludge from building back up, the annual flow of 3,000 new regulations should have automatic 10-year sunsets for each rule. Just as every carton of milk has an expiration date, so should regulations. Congress can renew them easily enough. And as times and technology change, so should regulations. Automatic sunsets give agencies a powerful incentive to regularly review their rules to make sure they are working as they should, and update them if needed.

The whole paper is here.

More regulatory reform ideas are in the new 2020 edition of Wayne Crews’s Ten Thousand Commandments.

CEI’s #NeverNeeded website is here.

#NeverNeeded Reg Reform Event on YouTube

This morning’s CEI Zoom event is now on YouTube. Following remarks by OIRA head Paul Ray, Kent Lassman, Wayne Crews, and I discuss regulatory reforms and Wayne’s new Ten Thousand Commandments report. Excerpts from the event are viewable here.

Has Trump Been a Net Deregulator?

Pierre Lemieux, in the cover story of the new Summer 2020 issue of the Cato Institute’s Regulation magazine, draws from the new 2020 edition of Ten Thousand Commandments to estimate the Trump administration’s net impact on regulation:

Trump’s Executive Order 13771, signed January 30, 2017, mandated the elimination of two existing rules (or formal regulations) for any new one implemented. The latest edition of regulatory analyst Clyde Wayne Crews’s annual report Ten Thousand Commandments notes that this goal was more than achieved over the first three years of the Trump administration. However, Crews adds, last year showed a notable loss of momentum as there were more regulatory actions than deregulatory actions in the pipeline at the end of 2019.

And:

Figure 5, which gives the number of pages in the CFR [Code of Federal Regulations] over time, suggests that the Trump administration has roughly capped the total volume of federal regulations at, or slightly over, the 185,000 pages they comprised at the end of the Obama presidency. According to this measure, the Trump administration stopped the growth of regulation, but it did not deregulate. Ryan Young, a senior fellow at the Competitive Enterprise Institute and colleague of Crews, summarizes the situation:

President Trump’s first three years of regulation are mixed. He deregulated in some areas and added new burdens in others. Transparency problems and poor data quality from agencies make it impossible to tell for certain if Trump has been a net deregulator. The most likely verdict is that he has slowed regulatory growth but has not cut regulation on net.

The whole article is excellent. Pierre gives a superb summary of the last three years of economic policy. Wayne Crews’s Ten Thousand Commandments study is here. Wayne and I offer an op-ed length summary of the report here.

Speaking at #NeverNeeded Event on June 22 with OIRA Administrator Paul Ray, CEI’s Kent Lassman, Wayne Crews

On Monday, June 22 at 11:00 ET, CEI is holding a Zoom event on regulatory reform with Paul Ray, who heads the Office of Information and Regulatory Affairs inside the Office of Management and Budget. That’s the agency most directly involved in monitoring the federal regulatory state.

Also speaking at the event are CEI president Kent Lassman, vice president for policy Wayne Crews, and me.

Registration is here. Afterwards, the event will be posted to YouTube. I’ll post a link when it’s up.

This Week in Ridiculous Regulations

The rate of new coronavirus cases increased last week, adding a note of caution to tentative efforts at reopening. Regulatory agencies issued new final regulations ranging from Florida bats to heraldic items.

On to the data:

  • Last week, 53 new final regulations were published in the Federal Register, after 71 the previous week.
  • That’s the equivalent of a new regulation every three hours and 10 minutes.
  • Federal agencies have issued 1,374 final regulations in 2020. At that pace, there will be 3,013 new final regulations. Last year’s total was 2,964 regulations.
  • There were also 53 proposed regulations in the Federal Register last week, for a total of 1,019 on the year. At that pace, there will be 2,235 new proposed regulations in 2020. Last year’s total was 2,184 proposed regulations.
  • Last week, agencies published 410 notices, for a total of 10,071 in 2020. At that pace, there will be 22,086 new notices this year. Last year’s total was 21,804.
  • Last week, 1,178 new pages were added to the Federal Register, after 1,976 pages the previous week.
  • The 2020 Federal Register totals 36,137 pages. It is on pace for 79,248 pages. The 2019 total was 79,267 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Three such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $1.38 billion and $4.19 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 28 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 268 new rules affect small businesses; 11 of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them significant.

Highlights from last week’s new regulations:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

Great News on Job Recovery

This is a press statement from CEI, originally posted at cei.org.

Upending expert predictions, the U.S economy added 2.5 million jobs in May and the unemployment dropped to 13.3 percent, according to the Labor Department. This, after months of pandemic-related shutdowns and layoffs. CEI experts welcomed news of the rebound and pointed to further reforms to aid recovery.

Statement by Ryan Young, CEI senior fellow:

“I never thought a 13.3 percent unemployment rate would be good news, yet today it indicates that many of the shutdown-related job losses may have been temporary, though to be clear, it is too early to know for sure. It helps that governments at all levels have waived around 600 regulations that were blocking the COVID-19 response and the economic recovery. Policy makers should keep that momentum going by making those waivers permanent and waiving more job-blocking rules, such as occupational licensing and excessive permitting requirements. Institutional safeguards such as automatic rule sunsets and ongoing reviews of existing regulations can provide long-term help by preventing this regulatory sludge from building back up and harming the next crisis.”​

Statement by Sean Higgins, CEI labor policy expert:

“The unexpectedly good news of Friday’s jobs report that 2 ½ million jobs were added in the last month is a rather inspiring testament to American ingenuity. Faced with an unprecedented crisis that forced businesses to completely shut down and workers to stay at home, those same companies and workers didn’t give up and instead improvised and found a way to get back to business. An unemployment rate of 13.3 percent rather than the expected 20 percent is as clear a bit of evidence as we could get that the best way to keep the economic recovery going is to simply allow businesses to re-open.​​”

Pandemics, #NeverNeeded Regulations, and Ten Thousand Commandments

Over at Inside Sources, Wayne Crews and I have a piece summarizing the main findings of Wayne’s new 2020 edition of Ten Thousand Commandments, plus some reforms that will help with the virus response and economic recovery:

The only thing in a typical family’s budget that costs more than regulation is housing—which itself is made more expensive by zoning ordinances, tariffs on steel and lumber, and arcane mortgage regulations….

Just as every gallon of milk has an expiration date, every new regulation should have an automatic sunset. That way, if a rule proves unworkable or goes obsolete, it will automatically go away. …

Congress should create an independent commission to go through large parts of the 185,000 pages of federal rules each year and send lawmakers a package of harmful or old rules to repeal with a single up-or-down vote.

Read the whole piece here. The 2020 edition of Ten Thousand Commandments is here. More resources are at CEI’s #NeverNeeded website.

Time to Permanently Sunset Waived #NeverNeeded Regulations

Many regulations have proven especially harmful during the COVID-19 crisis. This is why roughly 600 rules have been waived so far, according to Americans for Tax Reform’s handy tracker. But many of those waivers are temporary. Those temporary waivers should be made permanent.

One of the principles behind CEI’s #NeverNeeded campaign is that if a rule is not needed during a crisis, it was probably never needed at all.

We are not the only ones making such arguments. Sens. David Perdue (R-GA), Marsha Blackburn (R-TN), Mike Lee (R-UT),  Kelly Loeffler (R-GA), and Thom Tillis (R-NC) write in a letter to Office of Management and Budget (OMB) acting director Russell Vought, who faces a Senate vote this week to remove “acting” from his job title:

[W]e urge you to work with the Administration to sunset all federal regulations that have been waived and continue to be waived during the COVID-19 pandemic, allowing the rules to go back through the regulatory process to determine whether these regulations should be temporary or permanent. Consistent cost-benefit analysis and retrospective review on all regulations, including those produced by independent agencies, will help to ensure they will not cause undue harm in the future.

These are excellent suggestions. The COVID-era information we now have about the waived rules’ usefulness should play a role in deciding whether they are reinstated.

It is heartening that U.S. Senators are acting on regulatory reform when it is so urgently needed. Sunsetting waived rules is important. But there is more to do. Regulatory reform is a long-haul project.

The Code of Federal Regulations is more than 185,000 pages long. By any reasonable standard, that is far too much. Paring it down to a reasonable level is important not just for dealing with the COVID crisis more effectively, but for resiliency against the next crisis. We’re off to a good start. Now the job is to maintain momentum.

The Senators’ full letter is here. For more ideas on how to do so, see neverneeded.cei.org and CEI’s Ten Thousand Commandments study.

This Week in Ridiculous Regulations

CEI released the 2020 edition of Wayne Crews’s annual Ten Thousand Commandments report, which gives a big-picture view of the federal regulatory state. For summaries of the important bits, see here and here. Regulatory agencies issued new final regulations ranging from cigarette labels to 6’2” tuna. Note that some numbers are a bit lower than usual on account of a four-day Memorial Day work week.

On to the data:

  • Last week, 42 new final regulations were published in the Federal Register, after 60 the previous week.
  • That’s the equivalent of a new regulation every four hours.
  • Federal agencies have issued 1,257 final regulations in 2020. At that pace, there will be 3,022 new final regulations. Last year’s total was 2,964 regulations.
  • There were also 38 proposed regulations in the Federal Register last week, for a total of 914 on the year. At that pace, there will be 2,198 new proposed regulations in 2020. Last year’s total was 2,184 proposed regulations.
  • Last week, agencies published 383 notices, for a total of 9,160 in 2020. At that pace, there will be 22,019 new notices this year. Last year’s total was 21,804.
  • Last week, 1,619 new pages were added to the Federal Register, after 1,765 pages the previous week.
  • The 2020 Federal Register totals 32,975 pages. It is on pace for 78,390 pages. The 2019 total was 79,267 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Three such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $1.38 billion and $4.19 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 28 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 251 new rules affect small businesses; 11 of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them significant.

Highlights from last week’s new final regulations:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

Out Now: The 2020 Edition of Ten Thousand Commandments

The 2020 edition of Ten Thousand Commandments is out. Wayne Crews’s annual report gives a big picture view of the federal regulatory state. There has long been annual a federal budget for spending, but government regulations have no equivalent. Ten Thousand Commandments attempts to fill that gap until policy makers decide to follow basic transparency guidelines. Among the highlights:

  • In total, federal regulations cost an estimated $1.9 trillion per year. This “hidden tax” is greater than corporate and personal income tax revenues combined. If the cost of federal regulations were a national economy, it would be the world’s eighth largest, behind Italy and ahead of Brazil. This does not include state and local burdens.
  • That is equivalent to $14,455 per household That amounts to 18 percent of the average pre-tax household budget and exceeds every other item except housing.
  • Agencies published 2,964 new final regulations in 2019. This is the first year with fewer than 3,000 new regulations since records began being kept in 1976. However, agencies also listed 3,752 upcoming rules in the most recent twice-yearly Unified Agenda.
  • When regulatory outlays are combined with 2019’s $4.447 trillion in spending, the federal government alone takes up 30 percent of the economy.
  • Congress passed 105 bills in 2019, compared to 2,964 regulations. This means federal agencies issued 28 regulations for every bill passed. This “Unconstitutionality Index” almost exactly matches the historical average for the last decade.
  • The five agencies issuing the most rules are the Departments of Commerce, Defense, Health and Human Services, Transportation, and the Treasury.
  • Addressing the coronavirus crisis and the upcoming economic recovery will take more than spending. Regulatory reform is a crucial part of the agenda. Congress, agencies, and the president need to continue waiving regulations that are blocking access to health care and medical supplies and are preventing businesses from getting back on their feet once safety allows. They must also enact systemic reforms to prevent today’s regulatory bloat from hindering future crisis responses. President Trump must also ignore his regulatory impulses on issues like antitrust, social media and technology, infrastructure, trade restrictions, telecommunications, food and drugs, subsidies, and more.
  • 199,471 Federal Register pages in Trump’s first three years. That averages 66,490 pages per year. President Obama averaged 80,420 pages per year.

These numbers are especially alarming during the coronavirus pandemic. Some of those rules prevent sick people from accessing health care, make schooling more difficult, prevent people from working from home, and make it harder for small businesses to adapt to the new circumstances or find the funding they need to stay afloat. Ten Thousand Commandments, if anything, puts into stark relief the points CEI’s #NeverNeeded campaign is making.

The full report is here. For a shorter version, see the news release. Further reform ideas are at neverneeded.cei.org.