Taking aim at the regulatory walking dead

How to end rules that live on and on and on....

Some regulations live on and on and on....
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According to research by the Progressive Policy Institute (PPI), nearly 170,000 pages of federal regulations are now on the books, with more piling on every day. Economists Michael Mandel and Diana Carew find that the sheer number of pages in the Code of Federal Regulations grew by more than one-fifth between 2000 and 2011 and has more than doubled since 1975 (when there was a relatively paltry 71,224 pages of regs).

The problem is that regulations, once on the books, can live on for years – long past their relevance and serving no purpose except to burden businesses and individuals with the cost of compliance. They become the regulatory walking dead.

According to Mandel and Carew, one 2010 government study estimated the direct cost of federal regulatory compliance alone to be as much as $1.7 trillion a year.

These costs, Mandel and Carew say, are the result of “regulatory accumulation”:

Over time regulations naturally accumulate and layer on top of existing rules, resulting in a maze of duplicative and outdated rules companies must comply with. However, our current regulatory system has no effective process for addressing regulatory accumulation.

Compliance burdens can be especially acute when it comes to the federal tax code. In its 2012 report to Congress, the office of the Taxpayer Advocate named complexity as the single biggest problem taxpayers face. The office also estimated that businesses and individuals spend 6.1 billion hours a year on tax preparation or compliance – or the equivalent of hiring 3 million full-time employees.  The code itself is 4 million words long, says the 2012 report, and the guidance alone makes for a foot-tall stack of paper when printed. 

A “regulatory improvement commission” could eliminate years of accumulated regulation, freeing businesses and citizens from the burden of compliance.

Two recent proposals, however, seek to prune the regulatory thicket.

Based on a proposal by Mandel and Carew, Sens. Angus King (I-ME) and Roy Blunt (R-MO) introduced legislation in 2013 to create a bipartisan “Regulatory Improvement Commission,” which would review outdated regulations submitted by the public and by stakeholders and send to Congress, for an up-or-down vote, a package of regulations recommended for consolidation or repeal. Following the model of the successful defense Base Realignment and Closure (BRAC) commission, the members of the Regulatory Improvement Commission would be appointed by Congress and the President.

According to the Senators’ press release, the Commission would focus on regulations “that are not essential to broad priorities like the environment, public health, and safety, but instead are outdated, duplicative, or inefficient.”

At the state level, Connecticut Governor Dannel Malloy announced in late 2013 Executive Order 37, which would allow the public to submit comments on any regulation more than four years old and advocate for its repeal or modification. To make the task of finding and commenting on regulations easier for citizens, Gov. Malloy also posted all state regulations for the first time online. The first deadline for submission of public comments was December 16, 2013, followed by the submission of recommendations by each agency to the governor by February 2014.

While the best regulatory improvement of all would be comprehensive tax reform – the prospects for which are uncertain – proposals such as these could go far in the meantime to ensure that regulatory burdens don’t unduly drag down the economy.

The practical fix:
Because it’s so much easier for regulations to be created than to be repealed, the weight of “regulatory accumulation” is increasingly burdening businesses and individuals. The Progressive Policy Institute proposes a bipartisan “Regulatory Improvement Commission,” modeled after the successful base closure commissions begun in the late 1980s, to review outdated regulations and recommend their repeal or consolidation. Senators Angus King and Roy Blunt have proposed legislation (S. 1390) based on this idea. At the state level, Connecticut Governor Dannel Malloy signed an executive order inviting public comment on any regulation more than four years old.
Sample legislation:
Resources:

 

Image credit: istock/Getty

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