How The Big Beautiful Budget Bill Can Deliver Decisive Deregulation
Media coverage of the House-passed One Big Beautiful Bill (BBB; see committee report) naturally focuses on the spending. And that makes sense, with COVID-level deficits of $2 trillion on $7 trillion in outlays now entrenched. Action now moves to the Senate.
But regulatory compliance costs and suppressed productivity can affect the economy and our lives every bit as much as on-budget spending. So over the past decade we’ve seen House budget resolutions explicitly address regulation, as in this year’s “Policy Statement on Government Deregulation.”
This elevation of regulatory streamlining as a policy priority in part shaped BBB reconciliation negotiations in anticipation of simple-majority passage. This year, the House Judiciary Committee’s component included four important federal administrative state reforms—not just for rules, but also for more slippery guidance documents and policy statements. Unfortunately, these were yanked at the last moment. Senate negotiations offer an opportunity to revive them. Recaps of deregulatory provisions follow:
Congressional Review Act Enhancements Delayed
The proposed REINS Act (Regulations from the Executive In Need of Scrutiny) has long called for congressional affirmation of costly rules, building upon the resolution of disapproval process contained in the Congressional Review Act (CRA). The BBB would have borrowed from REINS to require legislative approval for any “major rule that increases revenue”—as opposed to all major rules—to comply with parliamentary requirements for spending legislation. These presumably include the likes of user fees for services, leasing fees, licensing fees, or penalties collected by the federal government.
Even “REINS-Lite,” though, wound up regarded as a parliamentary fatality. Besides, there was arguably potential for backfiring here, such as perverse use of “REINS-Lite’s” deregulation-intent to block deregulation. For example, an Interior Department rule reducing permitting fees for mining and accelerating project approvals could trigger more taxable economic activity, increasing federal revenue. My Competitive Enterprise Institute colleague James Broughel suggested narrowing the language to “major rules that ‘directly’ increase revenue, such as through a ‘new fee, tax, levy, or surcharge,’
Parliamentary hurdles on the Senate side for non-fiscal measures are high, with reconciliation provisions limited to those directly affecting the federal budget. Deregulatory provisions were, and remain, vulnerable in this context until changes happen. Celebratory proclamations about REINS-Lite continued right up to the bitter end, but only Amelia Davidson at Politicopicked up on the fact these were actually withdrawn from the final BBB.
Also lost were enhancements to the CRA-required reports to both houses of Congress and to the Government Accountability Office (GAO), covering whether rules are major or not, job effects, But here’s a bright side. While the specific reform parts are gone, the BBB now infuses OMB with $100 million through 2028. This may work out for the best, as the amended language under “Use of Funds” specifies that the Director of OMB shall “use amounts made available” to “pay expenses associated with improving regulatory processes and analyzing and reviewing rules issued by a covered agency.” “Covered agency” refers to the Departments of Education, Energy, Health and Human Services, Homeland Security, Justice, the Consumer Financial Protection Bureau, and the Environmental Protection Agency.direct and indirect cost assessments, and affirmation of constitutional authority. But even the existing, less-detailed reports are nearly impossible to track. That parallels the problem with guidance documents—there’s no centralized, publicly accessible repository for easy access.
Read more at Forbes