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Obama Needs To Confront Regulation
Obama Needs To Confront Regulation
January 18, 2011
Originally published in Forbes
Today President Obama released an Executive Order called "Improving Regulation and Regulatory Review." It calls for a government-wide review of rules, attention to ensure that benefits "justify" (rather than exceed) costs, and the use of "least burdensome" means for achieving regulatory ends.
The number of rules in the pipeline at agencies has surged in the past year, from 4,041 at the end of 2009 to 4,225 now, as will be detailed in the Competitive Enterprise Institute's upcoming Ten Thousand Commandments report. Major rules, those expected to cost over $100 million annually, have experienced an even greater surge.
Indeed, just to get where we were a year ago, many rules would have to be cut. Yet Obama's Wall Street Journal op-ed today, which announced the executive order, utterly glossed over the Environmental Protection Agency's C02 rules, the FCC's unauthorized net neutrality push and the torrent of rules yet to come from the health care and financial reform bills.
This executive order is hardly a war on red tape, and no affected businesses or consumers are going to be able to sue anybody to force compliance--it's just an "order" to agencies to behave. And, as my colleague Gregory Conko points out, it should be noted that there is already an Executive Order in effect that does what President Obama says this one will do. Both balancing safety against economic growth and requiring a review of existing rules are features of President Bill Clinton's EO 12866, which Obama reaffirmed when repealing Bush's EOs 13258 and 13422. One big question is: What will this new one do that's different?
Actually confronting regulation, the crippling extent of which remains unappreciated by both parties, requires going far beyond the words of an executive order. Some options include:
--Implement a bi-partisan "Regulatory Reduction Commission" to vote up or down annually on a package of rules to eliminate.
--Institute a moratorium or freeze on regulatory rulemaking now.
--Hold hearings on Sen. Mark Warner's, D-Va., "one-in, one-out" requirement for any new rule
--Re-discover federalism, that is, circumscribe the federal regulatory role regarding health and safety matters best left to states.
--Improve the requirement for quantifying regulatory costs, and selecting the least-cost compliance method.
--Require OMB's Regulatory Information Service Center to publish number of major and minor rules produced by each agency, and strengthen its oversight.
--Reinstate the Regulatory Program of the U.S. Government, which used to appear routinely as a companion document to the Budget.
--Enlarge regulatory flexibility and exemptions for small business.
--Declare Federal Register notices as insufficient notice to small business.
--Hold hearings to boost the scope of the Small Business Administration's "r3" regulatory review program to allow affected businesspeople to recommend rules to reduce.
--Lower the threshold at which a point-of-order against unfunded mandates applies.
--Lower the threshold for what counts as an "economically significant" rule, and improve explicit cost analysis.
--Explore, hold hearings on, and devise a limited "regulatory budget."
--Establish an annual presidential address or statement on the state of regulation and its impact on productivity and GDP.
--Sunset regulations after fixed period unless explicit reauthorization is made.
--Implement a supermajority requirement for extraordinarily costly mandates.
--Challenge and reject excessive delegation of legislative authority from Congress to agencies; That is, require Congressional fast-track approval before major or non-quantifiable agency-promulgated regulations take effect. (The REINS Act from Sen. Jim DeMint, R-S.C., and Rep. Geoff Davis, R-Ky., is a version that Congress could be talking about, especially given the costly rules to emerge from the heath care and financial legislation, and the unauthorized EPA action on CO2 and the FCC action on net neutrality.
An Obama review of regulations and instructions to agencies is welcome if serious, but actually reducing regulations will be another game altogether.