Toward a Federal Regulatory Budget
Ten Thousand Commandments 2018 - Chapter 2
When Congress spends money, a certain degree of disclosure helps voters hold their representatives accountable. Federal programs are funded by either raising taxes or borrowing, against a promise to repay with interest from future tax collections. Taxpayers can observe those decisions to some degree during the authorization and appropriations processes, and they can inspect the costs of programs and agencies in Congressional Budget Office publications and the federal budget’s historical tables.
However, Congress often “funds” objectives and programs through regulatory mandates.
Rather than taxing and paying directly, federal regulation compels the private sector, as well as state and local governments, to bear the costs of federal initiatives.
Regulation in such instances functions like an off-budget form of taxation and spending.
There is an unappreciated synergy between fiscal budgeting and regulatory “budgeting.”
Because the costs and economic effects of regulatory compliance are not budgeted and disclosed the same way as federal spending, regulatory initiatives can commandeer private sector resources with comparatively little public fuss. Policy makers may find it easier to impose regulatory costs than to embark on government spending because of the former’s lack of disclosure and accountability for costs.
And when regulatory compliance costs prove burdensome, Congress can escape accountability by blaming an agency for issuing an unpopular rule.
Congress often “funds” objectives and programs through regulatory mandates.
Read Chapter 3 – The Cost of Regulation and Intervention