Today, the U.S. House of Representatives House Oversight and Government Reform Committee conducted a hearing entitled “Regulatory Reform Task Forces Check-In,” to which I was invited to testify. Below are my five-minute oral remarks:
Good morning, I am Wayne Crews, vice president for policy at the Competitive Enterprise Institute, and I thank the chairman and members for the invitation to address Regulatory Reform task forces, two-for-one rule pacing, and cost management.
These steps reaffirm sound regulatory review and agency engagement, but will best function within a framework of improved congressional accountability for what regulators do.
Politics obscures it now, but alongside overseas developments like Britain’s one-in/three-out proposals to monitor regulatory costs have deep bipartisan pedigree.
Regulatory budgeting dates back to Jimmy Carter, and to Texas Sen. Lloyd Bentsen, who became Clinton Treasury Secretary.
A modern bipartisan root of Trump’s one-in/two-out is Sen. Mark Warner’s 2010 Pay-Go.
After nine months of the Trump administration, and after [the Office of Information and Regulatory Affairs] OIRA’s agency directive to include cost allowances in the upcoming Unified Agenda, what makes us know the Task Forces are solid ideas? What successes and weaknesses stand out?
Reagan’s Executive Order 12291, [which] kickstarted OIRA, showed that the pen and phone can expand liberty in terms of stabilizing rule counts and Federal Register pages. Trump’s reductions appear to be the most significant since then. Meanwhile, dozens of guidance documents have been rescinded, such as the Labor Department proclamations on franchising and independent contracting.
But too much of the regulatory apparatus is beyond OIRA’s scope.
The core reality is that revoking a rule requires another notice-and-comment rulemaking progression. And long-term, task force machinery can’t overcome presidents who deprioritize oversight.
Meanwhile, the 800-pound gorilla independent agencies get no OMB scrutiny, even under Trump’s orders. And until Trump’s orders, guidance documents, memoranda, and other regulatory dark matter rarely got scrutiny, either.
Also, task forces must address unmeasured categories of intervention that propel costs, not just discrete rules. When government steers while the market merely rows, that creates compounding costs even if no “budgetable” future rules get issued, such as the re-embrace of public utility models in the tech and telecom sectors.
Rules with cost analysis amount to a small percentage of the rulemaking enterprise. That, along with the administrative state’s broader weakening of democratic accountability, only strengthens the case for Congress’ restoration of Article I checks and balances. In the meantime, as Neomi Rao advises, Congress doesn’t have to wait; it can revoke rules Trump can’t.
Other steps include boosting OIRA resources and implementing a bipartisan Regulatory Improvement Commission with goals and targets. As for two-for-one, it may make sense to emphasize equivalent burdens. Perhaps dollar-for-dollar rather than rule-for-rule.
I highlight also the former U.S. Regulatory Program, a sister document to the federal budget and a model by which OIRA could compile annual regulatory transparency statistics to better compare apples to apples, to underscore when costs and benefits are not quantified, and to better distinguish between additive and subtractive rules and guidance.
At bottom, the benefits sought via regulation are also forms of wealth, and require market disciplines, not just political ones, to flourish. Markets and competitive enterprise make the world not just richer, but fairer, safer, and cleaner. Regulation doesn’t get all the credit.
Disagreements over regulatory benefits are the core concern that separate right and left today. These are irreconcilable, but that’s actually constructive, because it underscores that elected legislatures must resolve issues involving controversial regulations with massive effect.
But for lesser anxieties, my optimism rests in knowing that some among us agree that, sometimes, so-called market failures might be rooted in longstanding political failures, and that coercive top-down regulation isn’t always the answer. On good days, both the left and right understand regulatory capture and rent-seeking.
Until Article I comes to the rescue, here’s hoping that today’s invigorated savings and streamlining remain permanent changes to the regulatory and guidance landscape.
When it comes to economic expansion, you don’t have to tell the grass to grow, but you do need to move the rocks off of it. Why not use the new task forces as a lever? Thank you very much.
Full testimony here.