The federal administrative state hummed along for years, relatively unperturbed until Donald Trump implemented a freeze on new costs in January.
In the background, though, the decades-long accumulation of official designations of rule types and effects has complicated the prospects for fundamentally reforming the federal regulatory enterprise.
A confusing variety of terms federal agencies use when implementing rules — often with inadequate accountability — lets some rulemaking fly below the radar. It’s become increasingly difficult to discern the significance of the various kinds of significant and major rules—as well as of the myriad ostensibly minor rules.
Before lawmakers go to much further with regulatory reform legislation — on the generous assumption that it does reach the floor — they should inventory, simplify and consolidate the federal bureaucracy’s increasingly confusing regulatory nomenclature.
In the process of compiling a report on administrative decrees not subjected to notice and comment, I couldn’t help but note the unappreciated flood of rule categories like “major,” “non-major,” “significant,” “economically significant,” “substantive” and more.
So I decided to write a report about it: What’s the Difference between “Major,” “Significant,” and all those other Federal Rule Categories? A Case for Streamlining Regulatory Impact Classification.
Few recognize the profusion that’s built up since the 1946 Administrative Procedure Act. Various laws and executive orders have added to the glossary, as can be seen in the nearby table.
Some types of rules are defined in legislation; some in executive orders; other designations were the creations of administrators.
Surprisingly, for example, “economically significant” rules with over $100 million in economic impact are not actually specifically defined in law or executive order. The name is a term of art referring to a certain type of “significant regulatory action” referenced in former President Bill Clinton’s Executive Order 12866.
The problem now is that not knowing what to call regulatory actions nor how to clearly disclose their impact to Americans is a significant but artificially created obstacle to bipartisan efforts to address regulatory overreach. The whole bundle, not just part of it, needs to be taken into account in any reform legislation.
Of particular importance today is the Regulatory Accountability Act (S. 951) that has emerged as the primary vehicle. It has bipartisan sponsorship in the Senate, in particular Sen. Heidi Heitkamp (D-North Dakota), who readers might recall boarding Air Force One and appearing at Trump’s September 6 tax reform event in her home state.
The RAA, which would codify existing executive orders from presidents since Carter on reviewing and disclosing regulatory burdens, can either add to the confusion or decrease it, and policymakers need to take advantage of the unique opportunity to do the latter before it’s too late. As it stands, the bill would create yet new terms: “major guidance” and “high-impact rule.
Lawmakers should inventory, simplify and consolidate the federal bureaucracy’s increasingly confusing nomenclature.
Also urgent, along with addressing notice-and-comment regulations, the streamlining needs to extend to guidance documents, significant guidance documents, memoranda, interpretive bulletins, and other instances of informal “regulatory dark matter” that agencies use to implement policy without always following the Administrative Procedure Act’s rulemaking requirements. There are more kinds of these than anyone has counted.
Even Trump’s own famous “one-in, two-out” executive order 13771 on “Reducing Regulation and Controlling Regulatory Costs” emphasizes “significant regulatory actions” and guidance, letting “lesser” rules and guidance along that perhaps should not be let alone.
So it’s time for some nomenclature scrubbing.
Reporting on rules, especially on the major ones, could be refined by deciding between the terms “significant” or “major” rules to create more uniformity, by greatly expanding disclosure of guidance, and by subjecting guidance to reforms that treat it like ordinary rules.
The streamlined categories could be given greater clarity by assigning cost estimate tiers to rules—such as for example, those with estimated annual costs above $50 million and below $100 million, above $100 million and below $150 million, and so on. Further clarity would come from segregating regulations by categories such as paperwork, economic, social, safety, environmental; and those addressing agency internal operations that nonetheless get lumped in with other “rules.”
Bureaucracy, rather than interaction with elected representatives, dominates the individual’s relationship to the federal government. The number of rules and mandates promulgated by executive branch agencies far outstrips the number of laws passed by Congress, helping preserve a large, unwieldy, and undemocratic bureaucracy.
More fundamentally, Congress needs to review rule-making authority of runaway federal agencies and expand accountability for the rules our government is issuing. That entails relaiming its Article I lawmaking power and ending over-delegation to the executive branch.
So the stuff I’m talking about today is the low-hanging fruit.
Originally published to Forbes Online.