Welcome to 2015 and the Year of the Regulators

The tinsel had hardly fallen from the trees and the family reunion squabbles barely subsided—and the Washington Redskins’ disastrous season just ended—before two Washington Post news stories reminded us the New Year arrived with a decidedly Old Year practice.

The headlines screamed, “CareFirst is ordered to spend $56M on community health needs by D.C. regulators,” and “Nine Va. children died in unregulated day care in 2014, the deadliest year in a decade.”

Welcome to 2015 and the Year of the Regulators. They’ve been chomping at the bit during these days of Holiday quiet and now they’re coming out swinging as they emerge from their Yuletide slumber. And, like Underdog, they are here to save the day.

Crises always help their case, of course. In the case of “the children,” it boils down to regulators’ perennial assumption that once a rule is in place, the resulting outcome will address the issue at hand. For example, in 2011 the government reported that two children under the age of 13 were killed every day because they were not wearing a seat belt. Yet, mandatory seatbelts are already law of the land. So much for cause and effect.

The Post reported that nine children died in 2014 under the care of unregulated Virginia day care centers. But children placed in regulated day care facilities also died, and while perhaps not at the same rate, the old causation/correlation problem emerges again, because accidents will still happen. In fact, several of the deaths at the unregulated facilities involved house fires that started from accidental factors that could occur in any regulated facility (and in our homes, for that matter).

Any parent understands that. When he was a toddler, my son once teetered at the top of a staircase and ambled all the way down before we could get to him. He did not suffer permanent injury. But others have not emerged so unscathed. Yet, Fairfax County, Virginia, where we live, does not require that we install gates at the top of every stairycase and landing. And even if they did, enforcement is not only impossible but unnecessary. A parent’s anguished guilt far exceeds any regulatory fine.

The Post also reported that Virginia Department of Social Services Commissioner Margaret Schultze emailed her staff saying that “the department and the administration are concerned over the growing number of child deaths in unregulated settings.” But what about deaths in regulated settings? Is the regulators’ job merely to check off the “Do something” box?

The issue of CareFirst boils down to government bureaucrats trying to provide services using other people’s money. Specifically, the D.C. Insurance Commission believes that CareFirst’s billion-dollar cash reserve is “excessive,” and therefore the company should spend $56 million for “community health” needs. Forget the uncertainty of our current health care debate—including my organization’s pending U.S. Supreme Court challenge to Obamacare—and the fact that insurance companies always assume the possibility of catastrophes and claims surges. Private companies actually manage “rainy day funds” properly; governments do not.

The acting D.C. insurance commissioner “predicts” that Maryland and Virginia officials could “warm to the notion of tapping CareFirst’s surplus to address their own community health needs.” And he masks this veiled threat of collective force as a neighborly invitation to partake in the cornucopia profits of health care joy.

Of course, the federal government was also busy this December. While you were distracted by eggnog and popcorn strings, Congress finished the Omnibus budget bill and fled D.C., leaving the Executive Branch to add nearly 1,800 pages to the Federal Register with new regulations for everything from dropped calls to migratory birds.

Consider these highlights from selected final rules just published:

• The Department of Agriculture is no longer allowed to discriminate by age when handing out farm subsidies, and government contractors and subcontractors may no longer discriminate by sexual orientation or gender identity.
• The Federal Communications Commission can now punish phone companies if they have too many dropped calls in rural areas.
• The Federal Aviation Administration passed a rule to indicate that it will not change a previous rule on flight crew working hours and rest requirements.
• Federal prisons now have new rules for designated smoking areas.
• Five species of sawfish are now endangered.
• The rufa red knot, a migratory shorebird, is now a threatened species.

Are these all bad things in of themselves? Maybe, maybe not. But I’m a bit baffled there are even five species of sawfish to protect in the first place.

I’m sure we’ll see more such silliness over the coming 12 months—and beyond. And we at the Competitive Enterprise Institute will be here to tally it up and try to make sense of it all for you—leavened with a touch of humor, of course.

In the meantime, Happy New Year to you and yours