CEI Calls For ‘Ceiling’ on Regulation in Debt Ceiling Deal

Nicole Ciandella, 202-331-2773

Washington, D.C., July 14, 2011 – Two Competitive Enterprise Institute scholars of the regulatory state call on Congress and the President not to make any debt ceiling deal without putting a “ceiling” on overregulation, citing a precedent from a debt ceiling hike in 1996.

“When it comes to the foundations of the U.S. economy, neither party is using the debt-ceiling talks to address the proverbial elephant in the room,” write CEI’s John Berlau and Wayne Crews,  in National Review.  “In this case, it’s a trillion-dollar elephant that is stomping all over new business formation and job growth.” Crews is CEI’s Vice President for Policy and author of the Ten Thousand Commandments snapshot study of the Federal Register. Berlau is director of CEI’s Center for Investors and Entrepreneurs.

While recognizing the importance of reducing spending and holding the line on taxes, Crews and Berlau argue that politicians can’t ignore overregulation, which acts as a hidden tax and mandates massive spending by the private sector.  Citing recent statements by President Obama calling for review and repeal of “outdated regulations that stifle job creation,” Berlau and Crews think there could be common ground for a debt ceiling package with a “framework to put constraints on regulatory agencies and hold them more accountable to Congress and the courts.”

Crews and Berlau call for the package to include elements of bills before Congress including the REINS Act, which would require major regulations to be approved by Congress, and the Freedom Act of Sen. Olympia Snowe (R-Maine), which would make it easier for small businesses to challenge regulations in Court.  Ideas like the proposed “regulatory pay-go” from Sen. Mark Warner (D-VA) would also help provide a “ceiling” of sorts, as would a regulatory reduction commission.

As a precedent, they note that reforms of the regulatory process – including the Congressional Review Act that set up a procedure for Congress to block new regulations – were attached to a debt ceiling hike in 1996 as part of a deal between President Clinton and the GOP Congress.

The scholars conclude, “To resolve the current ‘ceiling’ we suffer on job creation, we must reduce the ‘regulatory budget’ of costly mandates faced by entrepreneurs.”

Both Berlau and Crews have addressed other aspects of the debt ceiling debate as well. In Forbes, Crews gives mixed reviews to a Balanced Budget Amendment. And Berlau’s National Review article “Constitutional Nonsense on Debt,” in which he debunks the argument that the 14th Amendment’s “public debt” clause gives the president the power to borrow without Congress, has been linked to by the Drudge Report and cited by radio talk show host Rush Limbaugh.

Berlau and Crews are available for interviews and media appearances to give a unique take on the debt ceiling debate.