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Regulation Without Representation
Regulation Without Representation
February 08, 2011
Originally published in Investor's Business Daily
Regulatory agencies enact more than 3,500 new regulations in an average year. A new federal rule hits the books roughly every two hours, 24 hours a day, 365 days a year.
Compare that with Congress, which passes fewer than 200 pieces of legislation per year. Only Congress has the power to legislate in the American system of government, but Congress never actually votes on most regulations.
This is regulation without representation, and it is a major problem.
Regulation without representation is a major reason why the Code of Federal Regulations has ballooned to 157,000 pages and counting. It makes it far more difficult to do business and is slowing economic recovery.
The total cost of federal regulations last year was over $1.75 trillion, according to economists Nicole and Mark Crain in a report for the Small Business Administration. This well exceeds the $1.5 trillion budget deficit that has gotten so much more attention.
Every year, about 200 major rules hit the books. These are defined as regulations that cost more than $100 million per year. In 2010, there were 224 major rules at various stages at the agencies.
Taken together, they cost businesses and consumers a bare minimum of $22.4 billion, yet Congress did not vote on most of them. Agencies have little incentive to restrain their command-and-control impulses without proper congressional oversight. That needs to change.
The Regulations from the Executive In Need of Scrutiny (Reins) Act would be a good start. True to its name, it would require that Congress actually vote on all new major regulations. It would be impractical to require Congress to hold 3,500 votes per year in addition to its usual business, but it is perfectly reasonable to require votes for major rules. If anything, decency requires it.
Unfortunately, both Congress and regulatory agencies have a vested interest in the status quo. On the congressional side, it allows politicians to claim they never voted for a regulation that turns out to be especially cumbersome or unpopular. Don't blame me, blame the agencies! Meanwhile, those agencies are reluctant to give up the relative autonomy they now enjoy.
One worry about Reins-style reform is that if Congress is required to vote on all regulations costing more than $100 million, bureaucrats could simply split major rules into smaller components costing less than $100 million each. They are clever creatures.
The Reins Act seeks to address this by requiring agencies to explicitly identify all new rules as either major or non-major and to list similar rules aimed at the same goal — so if they split a $100 million rule into smaller parts, it's easy to call them on it.
Rep. Geoff Davis, R-Ky., recently introduced the Reins Act as H.R. 10. That low bill number is good news for its political prospects. A typical two-year session of Congress will see thousands of bills introduced. Leadership will give very low numbers to legislation it strongly supports or feels is important. (For example, H.R. 1 in the last Congress was the stimulus bill.) Sen. Rand Paul, R-Ky., plans to introduce companion legislation in the Senate.
America desperately needs regulatory reform. Regulation doesn't get as much press as spending and deficits, but it's just as important. The reforms contained in the Reins Act would be a good first step to limit regulation without representation. But limiting is only a start — it should be ended.