Getting rid of the red tape that’s strangling our economy

Overview

“Many of the new rules are little known, even as they affect the way Americans eat, love and die.”  So one article from the New York Times describes the size and scope of recent regulations enacted by the Obama administration.

compliance concept with business elements on whiteboard

Indeed, there are few areas of life that remain untouched by federal regulations.  The massive annual compliance burden of government red tape is about $15,000 per family – or almost $2 trillion for the whole economy.  It’s getting harder for Americans to go about their business – much less to start or run a business – without finding an annoying and costly regulation they have to comply with.

Keep clicking to learn more about the regulation problem – and how we can solve it.

  • The federal government got a little too comfortable issuing annoying and costly regulations

    In addition to its power to pass and sign laws, the federal government has the power to put in place regulations — rules that deal with how the goals set in law will be accomplished.  

    This makes sense because laws can only be so long and have so many details… sometimes we need additional guidance about how to do things.  

    So Congress has been passing regulations for a long time, minding their own business.

    But within the past few years, people really started to notice that the regs were adding up – and becoming a major pain to deal with.  Because politicians never undo regs – and rarely update them – they only make new ones.

    Check out this chart from the George Washington University showing how the pages in the Code of Federal Regulations – which contains rules and regulations from federal agencies – has exploded:

    Pages_CFR_0

    One contributing factor is lack of accountability; Patrick McLaughlin writes in National Review

    “While every president since Jimmy Carter has tried to ensure the quality of new regulations, the process is severely limited. One gap in the process is the deference given to so-called independent agencies, such as the Consumer Financial Protection Bureau and the Federal Communications Commission. In short, the problem is that independent agencies aren’t required to produce economic analyses of new regulations. These analyses provide a check on whether there is a real problem that needs to be solved, and they incentivize regulators to consider multiple approaches to addressing the issue. It’s a simple problem-solving process, but it’s often bypassed or ignored.”

  • The Obama administration took things to a whole new level

    Within the last few years, though, things have really gotten out of control.  

    Sam Batkins from the American Action Forum compiled some incredibly compelling statistics demonstrating how the Obama administration has taken the regulatory burden to the next level:

    “During President Obama’s tenure, the nation has averaged roughly 81 major rules annually.  The federal government is open approximately 250 days annually, so this equates to a major regulation every three days or nearly two per week.”  

    Wood gavel, bunch of keys, scales and stack of old books against the background of a row of antique books bound in leather

    Another troubling point from Batkins:

    In more than six years in office, President Obama had imposed more regulations than President Bush did in eight years.”  

  • Regulations weigh down the economy and make it hard to do business

    The cost of regulations on the American people are real.  Thanks to federal red tape,  it’s increasingly hard to do business, the cost of goods is going up, and the freedoms that allow Americans to do their jobs and take care of their families without massive government interference are shrinking.

    A close up of a man in a suite with his hands tied up with red tape.

    One study shows the annual cost of complying with our many regulations is almost $2 trillion per year – a massive burden of almost $15,000 per family.

  • Mandate reviews of old regulations and proactive choices by Congress about whether they’re still worth it

    Requiring Congress to look at old regulations and make decisions about whether they should still be in place would represent major progress in cutting some of our massive federal red tape.  Senator Roy Blunt and Representative Randy Hultgren have introduced a bill that would do just that.  From a press release describing the bill:

    "To address the regulatory burden, the Regulatory Review and Sunset Act:

    • Establishes a bipartisan commission to review existing federal regulations and identify those that should be “sunsetted” to reduce unnecessary regulatory burdens.

    • Prioritizes for review regulations that are major rules (those with an economic impact of $100 million or more), as well as those that have been in effect more than 15 years and impose disproportionately high costs on small businesses.

    • Requires that annual and final commission recommendations on regulations be presented to Congress for approval by joint resolutions of Congress. If Congress votes to approve the commission’s recommendations, “sunsetting” of the regulations must take place.

    • Requires agencies to recommend to Congress statutory changes should a statute bind agencies to enforce rules they otherwise would sunset or repeal."

  • Limit the cost of new regulations the government can enact

    Right now, there isn't a formal process in place that requires the federal government to consider the cost of the regulations it puts in place on the American people.  One way to prevent the buildup of massive red tape in the future is to require the President to propose and Congress to vote on a "regulatory budget" that would cap the regulatory costs the government could impose on American families.

    Senator Mike Lee and Representative Jeb Hensarling's recently-introduced bill, The Article I Regulatory Budget Reform Act, provides one approach to enacting a regulatory budget.  From Senator Lee's press release:

    "The Article I Regulatory Budget Reform Act would, for the first time, require Congress to vote on the total regulatory burden each federal agency may impose on the American people each year. It would require a budget for federal regulatory costs similar to Congress’s annual budget for taxes and spending.
     
    Under the discipline of a regulatory budget, Congress would be directly responsible for the size and scope of the regulatory state. Executive agencies could still issue and enforce their rules, but only so long as their impact fits within the regulatory-cost limits established by Congress.
     
    In addition to Senator Lee, original co-sponsors to the Senate bill include Sen. Mike Enzi (R-WY) and Sen. Marco Rubio (R-FL). The House version, introduced by Rep. Mark Walker (R-NC), is co-sponsored by Chairman Hensarling (R-TX), and Reps. Dave Brat (R-VA), Mia Love (R-UT), John Ratcliffe (R-TX), and Berry Loudermilk (R-GA)." 

  • Give all new regulations an expiration date

    Ronald Reagan famously observed that "a government bureau is the nearest thing to eternal life we'll ever see on this earth."

    One key way to prevent the problem we have now - massive federal government growth and the buildup of federal regulations over time - from happening in the future?  Make sure any regulation passed has an expiration date so instead of sitting on the books unexamined for decades at a time, each regulation is examined by Congress and a determination is made as to whether it should be re-upped.

    Including sunset provisions in federal regulations would help prevent government tape from building in the future.

    This is often referred to as including "sunset provisions" within regulations, as each would effectively sunset when its expiration date was reached

    While the federal government doesn't use sunset revisions often, this practice has been used more widely -- with promising results.  Read more about how states have used sunset review provisions to manage the build-up of red tape in this Mercatus study.

    As stated in this Real Clear Policy article from 2012:

    "The case for regulatory sunsets practically makes itself.

    Back in 1997, the Heritage Foundation published a top ten list of obsolete programs, includingthe Rural Electrification Administration. Fifteen years later, all 10 are still around.

    It isn’t just Jurassic-era programs like those that need reevaluation. The Transportation Security Administration, created in 2002, is a laughingstock among security experts, some of whom have been known to print fake boarding passes and sneak into secure areas for fun. A decade of failure is long enough, and public opinion sourly concurs. Congress should de-nationalize airport security. A sunset law would make the process less politically painful.

    A federal sunset law would be difficult to implement since a lot of vested interests will fight very hard to keep their nests feathered, such as the politically connected companies that make the TSA’s ineffective full-body scanners. Enacting a sunset law could well require serious restructuring of congressional procedure. As the Cato Institute’s Chris Edwards notes, one way to create enough time for lawmakers to consider sunset commission recommendations would be to move to a two-year budget cycle with alternate years devoted to sunset commission proposals for reform and termination.

    But it could be a huge step in deflating our bloated federal government. Given that a new Gallup poll puts Congress’ approval rating at a record-low 10 percent, some serious restructuring might actually be in incumbents’ best interest. Whether Congress takes it up for the right or wrong reasons is irrelevant. Results matter more than intentions, and an automatic sunset law would deliver results."

  • Susan Dudley
    Expert ringing the alarm bells on our growing regulatory burden

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    "For over a century, concerns over the accountability of what some have called the “fourth branch” of government have ...

    "For over a century, concerns over the accountability of what some have called the “fourth branch” of government have led all three branches of government to take steps to exercise checks and balances on the development and enforcement of regulations."
    Why They Matter

    From her bio at the Mercatus Center:

    “Susan Dudley directs the George Washington University Regulatory Studies Center and is a Research Professor in the Trachtenberg School of Public Policy & Public Administration. She founded the Center in 2009 to bring high quality academic research to bear on regulatory policy. The Regulatory Studies Center provides serious research on current regulatory issues in a timely way, educates the next generation of policy makers and ...

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  • Sam Batkins
    Scholar slicing and dicing data so Americans know what regs cost the economy and their families

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    “Balanced regulatory reform...is an international standard practice, not a partisan exercise.”

    Why They Matter

    From his American Action Forum bio:

    “Sam Batkins is director of regulatory policy at the American Action Forum.  Batkins focuses his research on examining the rulemaking efforts of administrative agencies and Congress. His work has appeared in The Wall Street Journal, The New York Times, The Hill, Reuters, and The Washington Post, among other publications. He has testified before the U.S. House, Senate, and state legislatures across the country.” 

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  • Mike Lee
    U.S. Senator helping to lead the effort to require the U.S. to stick to a regulatory budget

    Screen Shot 2015-07-10 at 5.12.42 PM

    “Lawmaking is not a power - it’s a responsibility”

    Why They Matter

    From his U.S. Senate bio:

    “Elected in 2010 as Utah’s 16th Senator, Mike Lee has spent his career defending the basic liberties of Americans and Utahns as a tireless advocate for our founding constitutional principles.

    Senator Lee acquired a deep respect for the Constitution early on. His father, Rex Lee, who served as the Solicitor General under President Ronald Reagan, would often discuss varied aspects of judicial and constitutional doctrine around the kitchen table, from Due Process to the ...

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  • Latino Leaders Call for Less Regulation to Help Small Businesses Thrive

    (U.S. Rep. Will Hurd / Photo: AP) Just one day after Speaker of the House Paul Ryan (R-Wisc.) and his colleagues unveiled their new initiative against over-burdensome regulations, business leaders from the Latino community met in the nation’s capital to express the need for exactly that kind of change. “What …

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  • Why State Regulation Forced One Small Farm Co-op to Toss Out More than $3K of Good Milk

    We expect you’ll scratch your head over this one (via TheBlaze): Jenny Samuelson wasn’t on the delivery truck carrying 248 gallons of raw milk, 100 dozen organic eggs and other local meat and dairy products. If she herself was making the rounds to co-op members in Michigan, she said what …

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  • Missouri Small Business Owner Exposes Problems of Local Government Permits

    For many of us, the most intimate encounter we have with the government’s maze of permits is at the DMV, which also happens to be the least popular place in America. We all hate it. There will be a line. We will not receive great customer service. The processes will …

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  • This Mom Started Her Own Successful Business, but the Feds Want to Shut it Down

    Rhea Lana Riner was having trouble sticking to a family budget when it came to buying clothing for her kids. But the Arkansas stay-at-home mother of three saw an opportunity in her dilemma. In 1997, Riner started a kids’ clothing consignment business from her home. When Rhea Lana’s began, most …

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  • Small Businesses Are Calling on the EPA to Retract This Harmful Rule

    The Hill reports: The National Federation of Independent Business (NFIB) says the EPA’s controversial water regulation would be particularly troublesome for farmers, because it would devalue their land and prevent them from growing crops in certain places. In comments filed with the EPA on Wednesday, the NFIB asks the agency …

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  • New Regulations Could Upend Trucking Industry

    Never mind the smog factory that is modern China or the sickening pollution the Communist Party inflicts on its citizens. The real enemy in the federal government’s fight against climate polluters is the U.S. trucking industry. That’s according to the Obama administration, which has just rolled out a new set …

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