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May 7 2010

The Pervasive Influence of the Regulatory State

Nicole Kurokawa Neily

Our friends at the Competitive Enterprise Institute have created a clever video showing how much influence the government has over Americans’ daily lives. Check it out here:

In an article over at the Daily Caller, CEI fellow Ryan Young explains the video’s content more thoroughly – which, entertainingly, was produced for the Environmental Protection Agency’s “rulemaking matters” video contest!

As Young notes in the article, “There are so many rules, it takes 157,000 pages to list them all.” At the end of the day, such an onerous code is impossible for average Americans to keep track of – virtually ensuring that at some point, albeit inadvertently, you’re probably going to be breaking the law. (For great examples of ridiculous regulations, I recommend Young’s blog, Inertia Wins – he points out things like how it is illegal to deface milk cartons in Massachusetts, and that it is illegal for a 9th grader to have a mustache in Binghamton, New York.)

Granted, many of these regulations were intended to keep consumers safe – but do they? And if so, at what price? As the old saying goes, “the road to hell is paved with good intentions.” Let’s not forget, the compliance costs that accompany regulations raise prices for consumers at the front end (through compliance costs) and at the back end (through encouraging the growth an increasingly large and expensive federal bureaucracy to oversee these rules.) 

In a Fox Forum article a few weeks ago, Young and CEI executive vice president Wayne Crews offered some great (and common-sense!) advice for the federal government to address the regulatory nightmare facing the country.

One is disclosure. … Each year's federal budget, or the annual "Economic Report of the President," should include in-depth chapters exploring the regulatory state, along the lines of Ten Thousand Commandments. The more the public and policymakers know about regulatory costs, the more likely they are to do something about them. But disclosure alone is not enough.

Obsolete rules need to be removed from the books. Congress should task the Office of Management and Budget with identifying rules to eliminate each year. Congress should also implement its own bipartisan packages of cuts to be voted on, up or down, without amendment. Sunset provisions are a relatively simple way to do away with obsolete regulations. Like a carton of milk, every new regulation should have an expiration date, beyond which it gets discarded unless renewed by Congress. With today’s rapid technological change, five years is a reasonable term for sunsetting. 

Most important of all, Congress needs to reassume its lawmaking responsibilities. It passed 125 bills last year—but federal agencies passed 3,503 final rules. This "regulation without representation" should end. The Constitution says, "All legislative powers herein granted shall be vested in a Congress." Cabinet departments and regulatory agencies are not part of Congress; they should answer to it via at least expedited approval of the most onerous rules. Over-delegating its responsibilities to agencies lets Congress shift blame away from itself for excessive or unpopular regulations. The people's elected representatives should perform their rightful duty and approve all new laws, not 125 out of 3,503. 

Streamlining the regulatory process is one way of lightening the government’s burden on innovators and small businesses – and should be a priority for lawmakers at all levels (federal, state, and local.) The costs may be unseen, but they’re still there – and we all pay the price.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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