Often, spending is regulation in disguise. The 185,000-page Code of Federal Regulations is not the only way Washington regulates the economy. The federal government also runs more than 2,300 subsidy programs. In many cases, that money has strings attached. Recipients often have to follow certain rules for labor practices, environmental standards, and other federal diktats. The money is often only made available to politically favored industries, which gives businesses an incentive to shift away from their comparative advantages, and towards whatever Washington wants.
These regulatory subsidies have also been growing, especially since COVID. The Cato Institute’s Chris Edwards estimates that subsidy programs have more than doubled since the 1980s.
Reforming these programs is a tall task. It can’t be done all at once. Instead, Rep. Bob Good (R-VA) introduced a plan to slowly shrink such spending over time with H.RES. 18, the Less Is More Resolution. Rather than a piece of legislation, it is a change to the House of Representative’s rules.
The Less Is More Resolution is essentially a one-in-two-out rule for new spending programs. If Congress wants to add a new spending program, fine. But in exchange, it must cut at least two existing spending programs first. Moreover, each of those two programs has to at least equal the new program’s spending.
Over time, this would cut spending programs. It would also force Congress to prioritize its spending. If a new program is high-priority, then it must cut lower-priority programs, many of which run on auto-pilot long after they have outlived any usefulness.
One such example is World War II-era mohair subsidies, which not even President Bill Clinton could permanently cut. He successfully ended them in 1993. Just five years later, while Clinton was still in office, Congress revived them by sneaking them into a 4,000-page must-pass bill. Mohair subsidies remain on the books today, 25 years later. There are hundreds of similar stories throughout Washington that deserve better endings.
One of my regulatory reform mantras is that institutions matter. It is not enough to reform individual regulations or programs. We must also reform the system-level rules that keep generating those regulations and programs. Rep. Good’s Less Is More Resolution is one example of such an institution-level change that would help prevent such trickery. It is worth a try.
H.RES. 18, the Less Is More Resolution, is online here. CEI founder Fred Smith and I wrote a study on corporate welfare here, which I recently discussed with Richard Morrison on his Free the Economy podcast.
Rep. Good will also be joining Ben Lieberman, Ryan Nabil, and me at a CEI Hill Briefing on February 28 in the Longworth House Office Building.