Since the Federalist Papers, America has debated “Energy in the Executive.” But President Obama’s 2014 agenda framed by his State of the Union address heralds a class warfare agenda, one fusing an “income inequality” theme with federal industrial policy and other activism.
“When I can act on my own without Congress, I’m going to do so,” Obama promises. This spend-and-transfer fixation makes Americans poorer and dependent except for the lucky few running things.
Others have argued for federal budget rationality as essential to any anti-poverty agenda. This series proposes a greater prosperity enhancing opportunity, streamlining the nearly $2 trillion regulatory state and ending the uncertainty, wealth destruction and job loss it creates.
Agencies and the OMB review process should face a higher burden of proof regarding rules’ value.
What bureaucracies do has become untethered from economic efficiency and public safety. Their "regulation" does not necessarily make people safer, environments cleaner, or markets efficient.
One mild attempt at dealing with Rules Gone Wild was the January 2011 Executive Order 13563 on "Improving Regulation and Regulatory Review. It called for agencies to develop and execute plans to:
[P]periodically review its existing significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective or less burdensome.
Mild doesn't work anymore, and modification and streamlining doesn't happen. When agency analyses appear not to justify a rule or simply don't exist, which is the normal case, reviewers at OMB should be more forthright about say so, and make doubts plain. Yet even as over 3,500 rules and regulations accumulate annually, Congress, agencies, the president and the Office of Management and Budget stand by idly, reluctant to recommend legacy regulations to eliminate.
Regulations should be modified based on plain common sense, regardless of executive orders. OMB might note costs of presumably beneficial regulations, then compare those benefits to leaving resources with states, localities and individuals to hire policemen, firemen and emergency personnel and to paint lines down the middle of rural blacktop roads. Leaving resources in the hands of consumers to make their own decisions is neglected.
In other words, while we know that most regulations do not have cost-benefit assessments and cannot continue to pretend that they do, OMB has the experience and know-how to create a “benefit yardstick” of sorts to improve a "Regulatory Transparency Report" and objectively critique high cost, low benefit rules. (See "Reining in the Executive Branch Bureaucracy, Part 3: Make Regulations Transparent Like the Budget.")
Additionally, OMB could ask agencies to propose rules to cut. Or, OMB could have agencies rank their regulations and demonstrate that their least effective rules are superior to another agency’s rules. Results of such ranking questionnaires could be presented in the Transparency Report.
In this spirit, the OMB's 2013 Draft Report to Congress on the Benefits and Costs of Federal Regulation does make several worthwhile nods toward better regulatory daily operations, when it recommends (on p. 5):
[F]acilitating public participation and fostering transparency by using plain language; making objective, evidence-based assessment of costs and benefits an integral part of the regulatory decision-making process; using retrospective review to inform decisions about specific rules and, more broadly, about the appropriate interpretation of impact analyses that feature incomplete quantification; and, finally, aligning agency priorities across all levels of internal hierarchy.
To date, however, besides reviewing the limited implementation of certain parts of E.O. 13563 including “regulatory look back, reducing paperwork burdens, simplifying government communications, and promoting long-run economic growth and job creation via international regulatory cooperation,” nothing happens concretely with respect to substantially reducing the amount of regulation already in place.
Burdens continue to grow, overwhelming minor cutbacks like the "spilled milk as oil" example highlighted by the president. The philosophy of regulation remains strong and intact, no matter the damage it does.
Next Time: Congress Should Affirm Final Agency Rules Before They Are Effective
Also in The “Reining in the Executive Branch Bureaucracy” Series:
Part 1: Measure Regulatory Costs
Part 2: Regulatory Benefits? Maybe Not
Part 3: Make Regulations Transparent Like the Budget
Part 4: Put a Spotlight on Economically Significant Rules
Part 5: Categorize Regulations by Impact
Part 6: Deal With The Deadweight Cost Of Regulation
Part 7: Recognize and Reduce Indirect Costs of Regulation