Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
I’m Wayne Crews, director of competition and regulation policy at the Competitive Enterprise Institute, a Washington-based non-profit public interest group established in 1984. I’m here today to applaud the reintroduction of the Congressional Responsibility Act by Rep. J. D. Hayworth and Sen. Sam Brownback.
While it is crucial to maximize the disclosure of information on regulatory costs and on numbers and types of regulations, ultimately Congress must be made accountable to the voter for what regulatory agencies do. The Congressional Review Act seeks that goal by requiring Congress to approve agency rules before they are effective.
Traditional regulatory reform proposals have featured calls for better cost-benefit analysis and risk assessment, reviews of new and existing regulations, and paperwork reduction. All these are important. But in the final analysis, they amount to misguided attempts to get agencies to police themselves better. These proposals merely stress agency accountability.
The Congressional Responsibility Act recognizes instead that accountability of our elected representatives must be the guiding principle of regulatory reform. The proposal stands alone in demanding congressional approval for regulations.
Years of unchecked regulatory growth have taught policymakers that regulations don't necessarily do good things just because agencies or the rules' advocates say so. Regulations can do more harm than good, but most often we simply don't know whether benefits exceed costs. But the real culprits are not the agencies: Congress, our body of elected representatives, shirks the duty to make the tough calls itself and delegates too much of its lawmaking power to unelected agencies, and then fails to police them. Thus, agencies can hardly be faulted for not guaranteeing optimal regulation or for not ensuring that only "good" rules get through. Agencies face overwhelming incentives to expand their turf by regulating even in the absence of demonstrated need, since the only measure of agency productivity -- other than growth in its budget and number of employees -- is the number of regulations. One needn't waste time blaming agencies for emphasizing the very regulating they were set up to do in the first place. Better to point the finger at Congress.
The Congressional Responsibility Act does just that, seeking to ensure that in our representative democracy, Americans are not to be bound by "laws" enacted by people they didn’t elect.
To address excessive regulatory compliance costs and make the case for congressional accountability, CEI’s annual Ten Thousand Commandments report attempts to consolidate the mounds of regulatory data, facts and figures from government and other sources in a simple, straightforward fashion.
In 1998, economic and social regulations along with paperwork requirements cost the public $737 billion, which amounts to 44 percent the size of all federal outlays of $1.6 trillion. In other words, the off-budget government is approaching half the size of the budgeted one, is bigger than Canada’s GNP ($542 billion in 1995), and is larger than corporate pretax profits ($734 billion last year). (See Figure 1)
The average family of four’s 1997 after-tax income of $36,423 contained $7,239 in hidden regulatory costs. Thus regulatory costs consume 20 percent of the after-tax family budget.
Numbers of regulations – measured in terms of major rules, major rules finalized and Federal Register pages, have also increased, as Figure 2 shows.
By delegating such sweeping regulatory powers to bureaucrats, Congress has created a disconnect between the power to establish regulatory programs, and responsibility for the results of those programs. That sleight of hand allows Congress simultaneously to take credit for popular legislation, while scapegoating agencies for excessive regulatory compliance costs. Unfortunately, the agency bureaucrats that Congress blames when things go sour aren’t accountable to voters.
The Congressional Review Act reconnects rulemaking and responsibility by taking regulatory disclosure to its next logical level. Although important bills implementing paperwork reduction reform, unfunded mandates reform, congressional review of regulations, and small business regulatory relief, have passed since 1994, fundamental regulatory reform still awaits. The reason is that agencies issue most significant regulations because they are required to by Congress in the first place, so directing efforts at agencies can go only so far.
Thus, regulatory reform, rather than being seen solely as the technocratic cost-benefit campaign it is commonly portrayed as, should be understood also as requiring congressional reform. The Congressional Review Act recognizes that since Congress itself is the source of over-regulation, Congress must become the target of regulatory reform -- just as Congress has been the target of popular proposals like term limits, committee reform, and other reforms aimed at reining in government over-reach.
Accountability is also more practical, easier to achieve and less subject to criticism than traditional kinds of regulatory reform (See Figure 3). As it stands, in OMB’s 1998 Report to Congress – the most comprehensive official survey of regulatory costs and benefits -- less than 1% of agency final rule documents were reviewed. So, rather than solely denounce derivative agencies or scold OMB for failing to properly "audit" the regulatory state, the Congressional Responsibility Act’s strategy of curtailing the excessive delegation of power to unelected federal agency employees in the first place makes more sense.
Up to now, the most significant effort to improve accountability was the 104th Congress’s Congressional Review Act. That law sets up a 60-day period following agency publication of a regulation during which the rule will not take effect, to afford Congress an opportunity to pass a resolution of disapproval. However, thousands of rules have been issued, and none halted. Moreover, the law has the disadvantage that it effectively requires a 2/3 supermajority to strike a rule if the president decides to veto a disapproval resolution.
The Congressional Review Act, in contrast, would stipulate that no major agency rule becomes law until it receives an affirmative vote by Congress. This is in keeping with the Constitutional requirement that "All legislative Powers herein granted shall be vested in a Congress of the United States."
Policing agency cost-benefit analyses, the obsession of traditional regulatory reformers, becomes less important if our elected representatives must affirm new agency rules before they are binding, because agencies would be inspired to ensure that their rules met a reasonable cost-benefit benchmark before sending them to a newly answerable Congress. In other words, congressional accountability would force agencies to compete with one another before congressional overseers in terms of lives they save (or some other regulatory benefit) rather than think within their own square.
As with the tax code, Congress must make the grand judgments about where regulatory benefits lie, and take responsibility for the regulatory priorities that emerge.
Only Congress can properly compare questionable rules to the alternative benefits that could be gained if the costs went instead toward hiring policemen or firemen, or simply toward buying buckets of white paint to stripe the centers of dangerous rural blacktop roads.
If Congress then does a poor job ensuring net regulatory benefits, citizens have recourse at the ballot box. We will always lack that leverage with agencies, whose limited range of vision prevents their making the cross-agency comparisons necessary in setting government-wide priorities.
Ultimately, these dynamics would allow Congress to reapportion regulatory authority based on results achieved or unachieved, thus maximizing benefits far better than cost-benefit requirements imposed on agencies.
Reforms such as the Congressional Responsibility Act will help temper regulatory agency excess, because every elected representative will at last be on record as either in favor of or opposed to a particular regulation. With that, representative democracy will take a giant step toward "no regulation without representation."