The Rise Of The Nanny State Is Why America Needs A Regulatory Budget
Washington refuses to control spending, and it certainly doesn’t control the costs of federal regulations it imposes on citizens at the rate of over 3,500 annually.
Sen. Marco Rubio (R-Florida), who recently introduced the National Regulatory Budget Act of 2014, noted that over-regulation impedes entry into the middle class, “stifling innovation and competition, depriving workers of opportunities and denying consumers more choices.”
Administrative measures, like the president’s handful of executive orders on regulatory reform, or decades-old utilitarian cost-benefit analysis requirements that often go unmet, haven’t restrained the nanny state.
We monitor federal spending, the taxes we pay and the deficit. It’s equally important to monitor and reduce non-tax expenditures the government imposes. At nearly $2 trillion annually, regulatory compliance and economic impacts cost the equivalent of the entire fiscal budget of the mid-1990s.
The most important idea is a skeletal regulatory budget because, even if a regulatory cost budget presents only ballpark figures, regulations aren’t skeletal anymore.
In the most comprehensive regulatory budget, agency individual tallies would comprise a total regulatory budget, somewhat paralleling the fiscal budget. Congress would specify the total cost budget for which it is willing to be held accountable and divide that among agencies roughly in proportion to potential lives saved or some other metric for what is regarded as a regulatory benefit. The Rubio bill would do something resembling this via an Office of Regulatory Analysis.
A regulatory budget would induce cross-agency discipline, forcing health and safety agencies to “compete” to ensure that their least-effective, more poorly performing mandates save more lives per dollar or correct some alleged market imperfection better than another agency’s rules do. That means better quality decision-making, and better adherence to congressional intent.
The obviously unachievable “perfect” budget would be allocated such that further shifting of regulatory cost caps among health and safety agencies could save no more lives. Agencies would need to admit that a rule has limited or no benefits — or is even harmful.
A budget would help reveal that government probably ought not worry about remote risks, while recognizing that some significant risks are undertaken willingly (kiteboarding, using the stairs, forgetting to buy a smoke detector, juggling chainsaws).
Under budgeting, agencies would concentrate on properly assessing the costs of their initiatives, just as the fiscal budget focuses on costs and not benefits. Benefits should already have been assessed when Congress passed enabling legislation.
Budgeting would mean that adopting a new nanny-state regulation that may offer a minuscule improvement in safety would be weighed directly against the much greater and more cheaply achieved benefits somewhere else.
Agencies would be free to regulate as recklessly as they do now, but could lose the squandered budgetary allocation to a rival agency, or even face agency sunsetting. The latter would benefit consumers with respect to an entity like the Federal Communications Commission, for example, which, apart from the legitimate need for it to get spectrum into the marketplace, insists upon expanding its turf).
A more limited regulatory budget proposed in the 1990s by Rep. Lamar Smith (R-Texas) would budget compliance for each newly enacted law, like today’s mammoth health care and financial reform laws. Agencies desiring to exceed the compliance budget during rulemaking would need congressional approval.
Budgeting helps restrain over-delegation, and would be doubly powerful combined with the Sen. Rand Paul (R-KY) and Rep. Todd Young (R-Indiana) REINS Act effort to require Congress to approve final rules, and a regulatory reduction commission.
The reduction commission boasts recognized bipartisan appeal, and would lighten the initial workload that Rubio’s Office of Regulatory Analysis must perform.
A regulatory budget poses risks in its own right — particularly legitimization of government regulation relative to superior competitive disciplinary forces.
That’s why limiting government’s power — not just measuring it better, matters. Budgeting can only really work within that context.
While the budget’s compliance cost calculations would be difficult (and inevitably, even inaccurate and unmeasurable), they would be far easier to manage than separate cost and benefit calculations for every single rule, which isn’t done anyway.
Besides, agency workloads pale in comparison with the intractable, unrelenting regulatory compliance burdens the public faces.
Taxes, as massive as they are, increasingly tell less of the tale about government’s presence in the economy. The hidden costs of regulation have caught up, perhaps surpassed them.