A Brief Outline of a Regulatory Report Card Congress Should Enact

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Measure what is measurable, and make measurable what is not so
. — Quote frequently attributed to Galileo, that, alas, probably was not his.

If I let them compute those statistics, they’ll want to use them for planning. — Sir John Cowperthwaite to Milton Friedman on the lack of statistics for the Hong Kong economy, 1963.

The administrative state may be beyond streamlining, but it needs better mapping until we can find out for sure and either fix it or create a record for posterity.

In recent weeks, as we watch the administration and Congress expand spending and regulation, we have issued a number of commentaries on potential agenda items for consideration by the upcoming 118th Congress. Many were outlined in CEI’ Agenda for the 117th Congress and range from regulatory reduction commissions to the Regulations from the Executive in Need of Scrutiny (REINS) Act, which would require members of Congress to go on the record as either supporting or opposing significant regulations.

A more recent proposal is an “Office of No” to build the case against regulations where competitive discipline, property rights, privatization, and the like are better for economic prosperity and public safety This project would recognize the likely dominance of political failure over market failure in most circumstances.

Another newer proposal is emergency action by Congress to better disclose and control sub-regulatory guidance documents in the wake of Biden’s revocation of Trump’s executive order that partly did some of that. On top of the priority list for yours truly is an “Abuse of Crisis Prevention Act” to prevent the type of political predation seen in the wake of 9/11, the 2008 financial crisis, and the pandemic.

Those are all long shots with progressives in charge. Even in 2017, with Republicans in control of Congress and the presidency, major reforms like REINS and a broad update to the Administrative Procedure Act dubbed the “Regulatory Accountability Act” never materialized.

So at this juncture—as Biden launches a slate of “whole of government” spending and regulatory campaigns aimed at the “climate crisis,” “equity,” “competition policy,” and even at digital assets and “long COVID”—we at least need to press for the potentially bipartisan low-hanging fruit of a Regulatory Transparency Report Card for agencies and for the federal enterprise as a whole.

As described often in Ten Thousand Commandments, the report card should strive to make regulatory trends transparent by requiring that summary data on types of regulation and by agency be formally published alongside the annual federal budget, in the Economic Report of the President, or in some stand-alone document that gives better context and presentation that that seen in the Unified Agenda, the Federal Register, or on Regulations.gov

Regulation is regarded as government’s tool for checking the excesses of the free market. Biden made that pitch again this week at a White House event on the economy and inflation, claiming for the umpteenth time that he’s a “capitalist,” but that “capitalism without competition is exploitation,” while touting programs for greater federal government steering and control.

The “exploitation” happening is that of a government whose 60-plus departments, agencies, and commissions issue rules by the thousands annually and rarely clear out any of the old ones. Today’s deficits are the size of entire federal budgets of just a few decades ago. At least Washington measures spending, even if it fails to control it, but regulation is even less disciplined than spending.

Regulatory reform requires targeting Congress rather than agencies alone. That’s a tougher agenda. Still, we need disclosure no matter what, and it’s arguably a starting point or prerequisite for anything else. So, the first thing Congress ought to do is at least measure and describe regulation more precisely by employing objective, accessible, and informative cost and numerical data. In part, this would constitute a reversal of Biden’s recent undermining of regulatory disclosure and accountability.  

A Regulatory Report Card would provide relevant regulatory information without bogging down in the distracting net-benefit analyses emphasized by the Office of Management and Budget (OMB) but that rarely materialize in its unreliable and habitually tardy annual reports on regulation. Improved annual reporting can provide statistics about the history, costs, current scope, and trajectory of the regulatory enterprise—much like the way the federal budget does for spending and receipts for agencies and programs. That may help spur the congressional regulatory accountability that matters most for streamlining and discipline.

Among those snapshots and much else, reporting should disclose the proportion of each agency’s significant rulemakings that lack cost estimates. Knowing not only where agency cost estimates exist, but also where they have not been prepared, would highlight the best and worst agency efforts at cost disclosure, inform congressional oversight, and reveal whether or not the overall regulatory enterprise can be said to be doing more good than harm and uncover agency attempts to circumvent regulatory disclosure. My proposed iteration of a report card—which needs to include guidance documents also—appears below.

Regulatory Transparency Report Card

Recommended Official Summary Data by Program, Agency and Grand Total (with Five-Year Historical Tables)

  • Tallies of “economically significant” rules and minor rules by department, agency, and commission.
  • Tallies of significant and notable guidance documents, memoranda, and other “regulatory dark matter” by department, agency, and commission.
  • Numbers and percentages of executive and independent agency rules deemed “Deregulatory” (this important distinction rooted in Trump’s E.O 13,771 that Biden discarded needs to be restored).
  • Numbers and percentages of rules affecting small business, with deregulatory component.
  • Depictions of how regulations and guidance accumulate as a business grows.
  • The proportion of purportedly “non-significant” rules agencies elected to subject to Regulatory Impact Analysis or other scrutiny.
  • Aggregate cost estimates of regulation by category: paperwork, economic (for example, financial, antitrust, communications), social, health and safety, and environmental.
  • Tallies of cost estimates, including subtotals by agencies, departments, and grand federal total.
  • Numbers and percentages of regulations that contain numerical cost estimates.
  • Numbers and percentages of rules and regulations lacking cost estimates, with explanations.
  • Analysis of the Federal Register, including number of pages and proposed and final rule breakdowns by agency.
  • Number of major rules reported on by the Government Accountability Office in its database of reports on regulations, and comparison with the number published in the Federal Register. These should match for purposes of the Congressional Review Act.
  • Number and percentage of agency rules and guidance documents presented to Congress in accordance with the Congressional Review Act, and assessment of shortcomings in that regard.
  • Rankings of most active rulemaking agencies.
  • Proportions of rules and guidance that affect internal agency procedures alone.
  • Reconciliations with the Unified Agenda, such as depictions of rules newly appearing, and those that are carryovers from previous years.
  • Numbers and percentages of rules facing statutory or judicial deadlines that limit executive branch ability to supervise or restrain them, or for which weighing costs and benefits is statutorily prohibited.
  • Ultimate Percentages of rules reviewed by the OMB and action taken.