“Who you gonna call? Congress!”
That hardly sounds like an inspiring thought, given our national legislature’s recent approval ratings. But given the way things actually work in Washington, calling on Congress may not be such a bad thing. Why is that?
An answer can be found in the film Ghostbusters. Yes, that one. It was the most popular film of 1984, and its bad guy was an EPA agent named Walter Peck, whose needless meddling nearly unleashes Armageddon. Why were moviegoers receptive to the EPA being the bad guy? I’ll get to that in a minute. But first consider how things have changed over the 30 years since Ghostbusters redefined the term “blockbuster.”
Over the past several decades, we have witnessed an inexorable growth in the influence of government in our lives and livelihoods—at the national, state, and local level. Politicians from both parties pay lip service to rolling back unnecessary regulations. But how much overregulation is there exactly? The federal government spends close to $4 trillion every year. That much we do know. But there is no equivalent regulatory metric.
This is a problem, because without understanding the actual costs imposed by the regulatory state, we cannot begin to address the underlying struggles of the U.S. economy. Regulations imposed an economic burden of $1.86 trillion last year, according to estimates by my CEI colleague Wayne Crews. That is slightly more than Canada’s entire 2011 GDP! And that’s still an understatement, since agencies are not required to report the costs of the vast majority of rules.
In effect, regulation enables government to grow in the shadows. And by doing so, it masks its true costs. In Congress, legislation is subject to public hearings and open floor debate. Lawmakers’ votes are a matter of public record that voters can take into account. Regulatory agencies face no such scrutiny.
Moreover, it’s easier for policy makers to hide unpleasant or unpopular policies from the public by regulating instead of legislating. Requiring companies to provide, for example, job training, is much easier than voting for a job training program and having to budget for it.
This has led Congress to delegate away much of its lawmaking authority to regulatory agencies. Last year, Congress passed 72 laws, while agencies issued over 3,600 regulations—a difference of a factor of more than 50. This lack of transparency must end, and fortunately, there are some available tools to stem the increase. And that’s where Congress comes in.
The Regulations from the Executive In Need of Scrutiny (REINS) Act would require Congress to vote on all new regulations costing $100 million or more per year. At the very least, it would require members of Congress to take a public stance on controversial rules.
The Regulatory Improvement Act would establish an independent commission to comb through the Code of Federal Regulations in search of regulations that are obsolete, harmful, or redundant. The Commission would send a repeal package to Congress for an up-or-down vote, with no amendments allowed, to prevent vote-trading and backroom deals. This reform is based on the successful Base Realignment and Closure (BRAC) commission from the 1990s, which used a similar approach to close unneeded military bases after the end of the Cold War.
Finally, Congress could mandate executive agencies to tally up the cost estimates of their rules in a federal regulatory budget. There is no such requirement today. This may have the added benefit of highlighting how businesses use crony tactics to impose costs on their competitors.
These days, Americans don’t have much confidence in the ability of politicians from either major party to address these issues. The REINS Act and the Regulatory Improvement Acts are there for the taking, with a few more votes and a whole lot of truth-telling.
By making regulatory costs as transparent as direct taxes, and by making Congress directly responsible for those costs, I believe we can make significant progress in unleashing entrepreneurs to once again become the nation’s driving force for sustainability and growth.
Now, about Walter Peck. In the late 1970s, the EPA was seen by the public as the quintessential overbearing regulatory agency. Its efforts to pursue its regulatory agenda through heavy-handed and intrusive means—including proposed gas rationing in California—helped provoke a public backlash against it. This reaction led not only to Ghostbusters’ Walter Peck, but also aided in the election of the last deregulatory president, Ronald Reagan.
I think we’re in a similar spot now, and it’s a cause for optimism. I strongly suspect that years of the Obama administration’s unprecedented regulatory overreach has set the stage for another popular reaction. It is my hope that the American people are starting to care about regulatory overreach—much as in Ghostbusters—and letting their elected representatives know.