For the past two years there’s been a big production made of the Trump Administration’s year-end Status Report on the “one-in, two-out” regulatory reduction program. These proclamations of success are accompanied by criticisms that it doesn’t amount to anything on the one hand, and that executive overreach is afoot on the other.
Regulations, the product of unelected administrators, are far less disciplined than the federal spending unleashed by our elected representatives, and we know the great degree of supervision and restraint that gets. The Senate Homeland Security and Government Affairs Committee just held a hearing covering costs of regulations, and it showed once again the irreconcilable viewpoints of critics of the administrative state and the proponents.
To bring some discipline to the regulatory enterprise, there has for a long while needed to be an executive order on federal agency guidance documents. These influence much regulatory policy and can sometimes be improperly seen as binding on the public, according to the Administrative Conference of the United States.
But there also needs to be one from Trump now reasserting and insisting upon full compliance with the so called Regulatory Right-to-Know Act, an important disclosure tool for an undisciplined regulatory enterprise.
Passed as part of the Treasury Department appropriations bill in 2000, the Regulatory Right-to-Know Act formalized in statute the requirement that the Office of Management and Budget (OMB) prepare an annual “accounting statement and associated report” to Congress “containing an estimate of the total annual costs and benefits of Federal regulatory programs, including rules and paperwork”:
- In the aggregate;
- By agency, agency program, and program component; and
- By major rule.
In this annual submission (well it’s supposed to be; that’s the problem), the federal government outlines some partial costs and benefits of major rules to the public. The submission is called Report to Congress on the Benefits and Costs of Federal Regulations and Agency Compliance with the Unfunded Mandates Reform Act.
Problem is, the last such report covers only up to fiscal year 2016, pre-dating Trump. It’s three years out of date.
The definition of “major rule” and a $100 million threshold for them, by the way, had been codified for the first time in the Congressional Review Act, with a definition identical to that of Reagan’s E.O. 12291 on regulatory review (see Sec. 251. “Congressional Review of Agency Rulemaking”). It is with an eye toward emulating such longstanding regulatory oversight directives that Trump should regard his next moves.
The OMB asserted in its reports that “[t]he Regulatory Right-to-Know Act does not define ‘major rule’” and used a broader set of criteria to define major rules:
For the purposes of this Report, we define major rules to include all final rules promulgated by an Executive Branch agency that meet at least one of the following three conditions:
- Rules designated as major under 5 U.S.C. § 804(2);1 [Congressional Review Act]
- Rules designated as meeting the analysis threshold under the Unfunded Mandates Reform Act of 1995 (UMRA); or
- Rules designated as “economically significant” under section 3(f)(1) of Executive Order 12866.
In restarting the engines, its noteworthy that the Trump administration’s report is not simply the latest ever; there has never been one issued.
One might suppose the administration views the annual updates on the two-for-one program as some sort of compliance, but clearly it is not.
Furthermore, even in the recently issued reports, there is still no aggregate estimate, which the OMB, against the stipulation in the law, abandoned in 2002.
Right now the official position of the federal government is that regulations overall have no cost at all; they all on the whole provide net benefits. (The government doesn’t mind the steamrolling utilitarianism implied in such a boast.)
Also, the current procedure looks only at the immediate fiscal year year and previous ten. That is, the official account of the regulatory state leaves out all of 20th century plus most of first decade of 21st century (and the past three years of it, if one wants to get picky). This will not do at all.
The costs of regulations were not (really) calculated even after it was made a requirement under the Right-to-Know Act; they certainly weren’t calculated when it was not a requirement before 2000.
The Trump administration should revive the Report to Congress in a high-profile way with an executive order reaffirming the seriousness and magnitude of administrative state intervention and reissue the already-in-effect command for an aggregate regulatory cost evaluation.
The estimate will not be accurate, and cannot be accurate, but far too many categories of costs are neglected in a rent-seeking administrative state that need to be named. The aim is to demonstrate what we don’t know about the regulatory law-making enterprise, and to reinstate congressional accountability for it. The new executive order would serve to reaffirm Article I, with an eye toward Congress approving all these rules and their unknowable costs.
By extension from the irresponsibility in the fiscal budgetary deficits and debts, we know the regulatory enterprise gets even worse supervision and likely boasts an unreckoned magnitude.
There are compliance costs, direct costs, indirect costs, GDP losses and compounding of it all that go unacknowledged. Even now, we are on the verge of government takeover of major sectors of the economy if certain progressive ideas win the day, none of which gets recognized as costs by the ones imposing them.
The one-in, two-out executive order will not serve as a legacy for the administration, since it will be overturned. But well-positioned executive orders addressing the guidance document phenomenon, and reasserting honesty and thoroughness in reporting regulatory costs could have some staying power.
Originally published at Forbes.