a freeze on rulemaking, the role of law and economics staff in policymaking, rule review and repeal, stricter cost analysis, dissecting regulatory dark matter, boosting Unified Agenda disclosure, tracking rule accumulation, issuing a “regulatory report card,” improving “major rule” classification, analyzing economic regulations separately from other varieties, improving “transfer cost” assessments, and reckoning with indirect costs.
Part 13: Implement a “Do Not Regulate” Office to Clarify Economic Liberalization Alternatives to, and Explicit Exit Strategies from, Command and Control Rules
All regulatory enabling statutes, and subsequent proposed rules and final rules, contain ambiguities that may not be apparent at the outset and that could have been resolved differently. Accumulated errors and future compounded blunders affect the trajectory of society from health, wealth, and fairness standpoints.
Yet, once rules and the agencies administering them are in place, they become part of the atmosphere, taken for granted. Then their scope expands; resolutions of even new policy issues are constrained by the self-interested blinders of the central-bureaucracy perch itself, and trend toward greater centralization and away from enterprise and dispersed expertise. The Federal Communications Commission’s net neutrality rule is a recent specific example that characterizes the failure of the entire “administrative state” model generally.
As a remedy for lesser concerns such as inadequate cost-benefit analysis, some have called for an independent congressional office of regulatory analysis resembling the Congressional Budget Office (for example, see the report on the Congressional Office of Regulatory Analysis Creation Act) .
This would go beyond the call for more resources for the Office of Management and Budget (OMB) or additional agency economists discussed in this series. There are scenarios in which the independent office could be a good idea, particularly if the entity were formally chartered with a pro-market institution, anti-bureaucracy-led-regulation “bias” or pre-disposition to offset the pro-regulatory bias prevailing in the entire rest of the federal government, including its independent agencies.
A formal body could highlight the desirability of market-oriented or liberalization alternatives over command options for every regulation, continually present the case for eliminating existing rules (the alternative to the administrative state model is not “no regulation, so don’t even). Sometimes this may only address a subset of the concerns motivating the rule and statutory interpretation, but it should incorporate visions and plans for elimination of regulatory agencies themselves. There can be “species adoption” alternatives to the Endangered Species alienate-and-enrage-landowner model; school choice does more than school “reform”; road and airspace privatization change how autonomous vehicles and drones evolve; and so on.
The new office would embody a much stronger version of the Office of Information and Regulatory Affairs or a body to replace it, in conjunction with agency law and economics personnel of laissez-faire persuasion to embody a “Bureau of No” role.
Bureaucracy and administrative state overreach may not only impede economic efficiency but also undermine health, safety and environmental progress. Healthy government requires recognizing downsides to coercive intervention; it requires vigilant legislative and executive institutions and mindsets that seek reasons not to add yet another rule or decree to the existing tens of thousands. Nothing like that exists now, as regulations merely accumulate and never retract. Meanwhile, the public has a right to know the ways federal agencies have harmed and harm that which they purport to oversee, and how those negatives may propagate beyond the agency throughout the economy and society.
Despite semi-formal central review of economic, environmental, and health and safety regulations and their accompanying paperwork since the late 1970s and the 1980s, an escalating regulatory burden is apparent.
- The 2016 Federal Register is on pace to be the largest ever seen, already exceeding 70,000 pages in mid-October, when the all-time-high is 81,405 in 2010.
- Costs of regulation have grown while benefits remain ambiguous, even as entire sectors of society experience regulation from independent agencies that get little scrutiny.
- Economically significant and major rules reviewed annually have increased significantly during the past decade.
- Regulatory guidance, memoranda and other “regulatory dark matter” outside the normal notice and comment procedure lacks adequate scrutiny and increasingly concern policymakers.
It can no longer suffice to cut federal spending and balance the budget. This series has demonstrated the march of bureaucracy and regulation and proposed ideas for liberalization needed alongside spending control.
The current reality assures us that the Constitution isn’t coming to the rescue in the near term, however. The political left is irretrievably wedded to the administrative state, and even most right-of-center institutions are as well. The federal bureaucracy is taken for granted.
But there is much about which to be optimistic; the ideas that created the American experiment in the first place remain “discovered,” readily available in the public domain. And with groups like the bipartisan No Labels addressing reform, there is some cross-partisan momentum for economic and regulatory reform. In colleges, there is some animated constituency for limited government.
The regulatory process, therefore, itself needs more regulation. The new normal should be one ensuring that, if an expensive or burdensome regulation is enacted, elected representatives are on record for or against it, and accountable to voters. While it would be preferable for Congress to implement measures that directly limit agency authority, many recommendations presented in this series can be implemented by executive action, by the same “pens and phones” used in recent years to expand the state.
The federal regulatory enterprise increasingly affects many, and changes are likely one way or another. If conventional options to restore liberties and elevate the rule of law remain ignored, the states themselves may address federal expansion by taking rightful powers back from Congress and the executive branch. The Constitution’s Article V does provide for the states to call a convention to amend the Constitution and restore balance of power, and several states are pursuing that option. Additionally, the “Regulation Freedom Amendment,” if Congress adopted it (or if two-thirds of the states required Congress to propose said amendment) would stipulate that in any given instance, a quarter of the members of either the House or the Senate could require Congress to vote on a significant federal regulation, very much like the REINS Act (Regulations from the Executive In Need of Scrutiny) would do. Such state-led measures can be avoided by Congress sensibly reconsidering the regulatory state. The modern statesman’s primary task is to double GDP rather than double spending or regulatory burdens, no matter the political party.
Also in this Series:
How A New President Can Roll Back Bureaucracy, Part 1: Freeze Regulations Temporarily
How A New President Can Roll Back Bureaucracy, Part 2: Boost Regulatory Review Resources and Free Market Law and Economics Staff at Agencies
How A New President Can Roll Back Bureaucracy, Part 3: Professionalize Review, Revision, Repeal and Sunsetting of Regulations
How A New President Can Roll Back Bureaucracy, Part 4: Expand Number of Rules Receiving Cost Analysis
How A New President Can Roll Back Bureaucracy, Part 5: Scrutinize All Agency Decrees That Affect the Public, Not Just Formal “Rules”
How A New President Can Roll Back Bureaucracy, Part 6: Enhance Rule Disclosure In the Unified Agenda of Federal Regulations
How A New President Can Roll Back Bureaucracy, Part 7: Track the Accumulation of Federal Regulations as Businesses Sectors Grow
How A New President Can Roll Back Bureaucracy, Part 8: Compile an Annual Regulatory Transparency Report Card
How A New President Can Roll Back Bureaucracy, Part 9: Improve the Classification of Major Rules
How A New President Can Roll Back Bureaucracy, Part 10: Account Separately for Economic, Health & Safety, and Environmental Regulations
How A New President Can Roll Back Bureaucracy, Part 11: Analyze “Transfer” Costs And Recognize Deadweight Costs of Government
How A New President Can Roll Back Bureaucracy, Part 12: Acknowledge and Minimize Indirect Costs of Regulations
This series builds upon recommendations in “One Nation Ungovernable? Confronting the Modern Regulatory State,” in Donald J. Boudreaux, ed., What America’s Decline In Economic Freedom Means for Entrepreneurship and Prosperity, Fraser Institute and Mercatus Center at George Mason University (2015), pp. 117-181.