Introduction: Toward a Regulatory Budget
When Congress spends money, a modicum of disclosure helps voters hold their representatives accountable. Washington funds many programs either by raising taxes or by borrowing, promising to repay with interest from future tax collections. Taxpayers can observe those decisions to at least some degree during the authorization and appropriations processes, and they can inspect the
costs of programs and agencies in Congressional Budget Office (CBO) publications and the federal budget historical tables.
Congress also “funds” objectives and programs through regulatory mandates. Rather than taxing and paying directly, federal regulation compels the private sector, as well as state and local governments, to bear the costs of federal initiatives. Regulation is essentially an off-budget form of taxation and spending.
Because the costs and economic effects of regulatory compliance are not budgeted and disclosed the way that federal spending is, regulatory initiatives can commandeer private sector resources with comparatively little public fuss. Policy makers find it easier to impose regulatory costs than to embark on government spending because of the former’s lack of disclosure and accountability for costs. And when regulatory compliance costs prove burdensome, Congress can escape accountability by blaming an agency for issuing an unpopular rule.
The 2017 edition of Ten Thousand Commandments helps illustrate the need for a regulatory budget to counter these dynamics. It contains four sections:
- An overview of the costs and scope of the regulatory state, including its estimated size compared with federal budgetary components and gross domestic product (GDP);
- An analysis of trends in the numbers of regulations issued by agencies, based on information provided in the Federal Register and in “The Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions”;
- Recommendations for reform that emphasize improving congressional accountability for rulemaking; and
- An appendix containing historical tables of regulatory trends over past decades.
Although challenging, it is possible to get a sense of the very substantial costs of the regulatory state. For the good of the nation's economic health and the welfare of people as both citizens and consumers, the regulatory process should be made more transparent, brought under democratic control, and required to provide clear net benefits.