Announcement of the establishment of a website dedicated to the implementation of a regulatory budget, public comments welcome below.

Editor’s Note: The myriad of proposed legislation to control the expansion of the regulatory state fall short in one major aspect–even if enacted in total the cumulative costs of complying with the ever ending flow of regulations will increase. The articles in this precedent setting forum are the initial steps to address this issue.

Starting in the 1970’s the United States was without question the world leader in establishing centralized regulatory review; but in the area of controlling the cumulative cost of regulations the United States has taken no real action since in 1979 when the Carter Administration developed a prototype regulatory budget for the Environmental Protection Agency and its attendant Regulatory Cost Accounting Act.

The essence of a regulatory budget is considerably more than establishing a ceiling on the costs that can be imposed on the public; more importantly it gives the Congress the absolute authority to determine whether the size of the regulatory state should increase, decrease or remain constant. In this instance OIRA can no longer be the point of the debate because is authorities are not impacted by the proposal.

A Broad Base of Support for a Regulatory Budget

Legislative Options

S. 2982 (May 2016, Senator Mike Lee; R-Utah)

S. 2988 (December 2014, Senator Mike Lee; R-Utah)

S 51 (2) (January 1979, Senator Lloyd Bentsen; D-Texas)

Legal Analysis

 

Regulatory Reform in the 114th and 115th Congresses  Jarrett Dieterle

Public Comments  to  OMB on the Implementation of Regulatory Budget

The Hill (Feb 2017) On A Regulatory Budget

Pierce Reg Budget 2016

Editor’s Note:  The following statements made  by Professor Pierce are  pivotal in any reassessment of OIRA’s role over its next thirty five years of existence.

For almost as long as OIRA has been applying BCA, some of the smartest and most productive progressive scholars have criticized the role of OIRA generally and OIRA’s use of BCA in particular. It is time for those scholars to stop wasting their energy tilting at windmills and put their extraordinary talents to use in more promising endeavors.

I continue to support the proposal that Justice (then Professor) Breyer made in 1993; we should replace counterproductive judicial review with review by a version of OIRA that is better staffed and broader in the values in brings to the process.

Bounded Institutions 

Publisher’s Note: This article presents an  economic analysis of the concept of a regulatory budget.

Yair Listokin; The Yale Law Journal

…Should Congress bound the EPA by subjecting its regulations to a “regulatory budget” or should it allow the EPA to “unboundedly” enact any regulations that meet some standard?

…..The analysis of the previous two Parts offers several reasons to believe that bounded institutional structures such as regulatory budgeting may prove superior to traditional unbounded oversight methods. 

… Instead of an all or nothing approach to regulatory budgeting, wherein a regulatory budget is either applied to all agencies or none, the analysis provided here suggests that a regulatory budget may be appropriate for some agencies but not others. Alternatively, a regulatory budget may be appropriate for the head of an agency to delegate to a sub-agency, but inappropriate for Congress to demand of an entire agency.

A Regulatory Budget: A Bridge to a National Constituency for OIRA 

There is no better way to develop a national constituency for OIRA than to have it assume responsibility for the implementation of a new Act of Congressa regulatory budget.

Wayne Crews on a Regulatory Budget

Our case for capping and “budgeting” regulatory costs across federal agencies opens by asserting that that, perhaps apart from certain raw compliance and paperwork burdens, tabulating the subjective and indirect costs of regulations experienced at the individual level and economy-wide is impossible.

Let’s get started with the first pitfall [associated with the implementation of a regulator budget] today, with more to come later.

Here’s the second potential pitfall, with more to come later.

Here’s the third potential pitfall for those attempting a regulatory budget.

Part IV

Part V

Part VI

A Skeptical Look at a Regulatory Budget

Some members of Congress would like to create a “regulatory budget” specifically to limit the costs of red tape. Sen. Mike Lee, R-Utah, for instance, has argued here that such a budget “would give regulatory agencies … an incentive to make their regulations cost-effective.”

The idea has a common sense appeal to it. Regulatory decision making—say proponents—would be governed by incentives created by budget allocations, seamlessly leading regulators to limit and prioritize rule-making.

 Unfortunately, the vision is as unattainable as it is tempting

Putting Regulators on a Budget by Jeff Rosen

In nearly every type of organization, whether public or private, budgeting is a routine and unavoidable necessity. Could anyone imagine a unit of Walmart being told it did not need to budget and instead could spend any amount it wanted? Could any household function that way? Government surely can’t, and since the 1920s the annual fiscal budget process has limited what federal agencies can spend each year. An even older federal statute known as the Antideficiency Act makes it unlawful for a federal-agency employee to spend more money than his agency was authorized. Violations carry significant consequences, including the possibility of criminal penalties.

But what about federal regulators?

A Regulatory Budget and a Strategic Regulatory Agenda: Twin Reforms for More Strategic, Integrated and Democratic Regulatory Governance by G. Bruce Doern

Approaches to the development of new regulations have been improved in recent years, but they remain weak on addressing three central problems of regulatory governance. First, the overall coordination and integration of the various regulations remains very difficult because there is no strategic cross-governmental regulatory agenda. Second, the full cost of regulations – the aggregated public administrative costs coupled with the much larger ―hidden‖ costs to companies, civil society organizations, and citizens – is not yet transparent to governments and stakeholders. Finally, no mechanism exists to constrain the costs of regulations in an integrated, systematic, and transparent fashion so as to help maximize the benefits of regulation.

Essay: The Regulatory Budget Revisited by Jeffrey A. Rosen and Brian Callanan

National debt and the expanse of the administrative state have increased significantly in recent decades.  Nonetheless, regulation and fiscal policy have long been understood to be partially substitutable tools of government action. Congress could, for example, appropriate public dollars to pay for health insurance for the sick and uninsured, or it could require private firms to offer coverage without regard to pre-existing conditions. Congress could tax the carbon content of fuels, or it could ban greenhouse gas emissions above limits specified by agency rules. But a less obvious connection between regulation and fiscal policy runs deeper still: government borrowing and regulation often serve as substitutes for taxation that operate outside the normal disciplines of public finance and political accountability.

Regulatory Cost Assessment Act Of 2014

Regulatory Cost Assessment Act of 2014 – Amends the Congressional Budget Act of 1974 to establish and enforce a federal regulatory budget.

Requires the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) to submit jointly to the President and Congress an analysis of the cost and economic effects of federal regulations, including recommendations for improvements to the regulatory budgeting process.

Requires CBO to submit: (1) a baseline projecting the federal regulatory cost over at least five fiscal years, (2) analysis of the regulatory cost of legislation reported by congressional committees, and (3) look-back reviews comparing CBO estimates with actual cost. 

National Regulatory Budget Act of 2014

To establish a National Regulatory Budget, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, 3 SECTION 1. SHORT TITLE. This Act may be cited as the ‘‘National Regulatory 5 Budget Act of 2014’’. 6 SEC. 2. ESTABLISHMENT OF THE OFFICE OF REGULATORY 7 ANALYSIS. 8 (a) IN GENERAL.—Part I of title 5, United States 9 Code, is amended by inserting after chapter 6 the following.

Regulatory Deossification Revisited, by Jim Tozzi

Every year the federal government decides three major economic matters 1) the amount of money that the government will spend 2) the amount of money it will raise in taxes and 3) the amount of money that it will require the private sector and states, municipalities and tribes to spend on regulatory compliance costs. The first two issues are decided, however imperfectly, through formal processes that are subject to financial limitations. Regulatory burdens, by contrast, are imposed by legislators and regulators on an ad hoc basis without any financial ceiling. 

Three Reasons Why OIRA Needs A Strong Institutional Base, by Jim Tozzi

OIRA, the Office of Information and Regulatory Affairs, located in the White House Office of Management and Budget, is the nation’s gatekeeper over federal regulatory activity. All executive branch agencies are prohibited from releasing economically significant regulations without first submitting their regulations to OIRA for review.

In the performance of this duty OIRA is often maligned by one or more parties affected by it decisions. Unfortunately the nation as whole, which is the beneficiary of OIRA decisions, seldom speaks in its defense.

The Coming of the Regulatory Budget by Jim Tozzi

The White House Office of Management and Budget (OMB) proposed the first regulatory budget proposal and regulatory cost accounting legislation in 1979. Subsequently, a number of Presidents and members of Congress have continued to endorse proposals to create a regulatory budget for the federal government. Some thirty-six years later, although the idea of a regulatory budget has yet to become law, there has been a resurgence of support for such a budget. Over the last year or so, numerous actions have taken place, which reveal considerable interest in institutionalizing a regulatory budget.

In 1979 OMB published the first regulatory budget and supporting regulatory cost accounting act.

The concept of a Regulatory Budget has been debated for many years. CRE is making available to the public a Regulatory Budget developed by OMB over 20 years ago for EPA. The document includes not only an analysis of the economic and legal foundations for a Regulatory Budget but also provides recommendations for the imposition of specific numeric caps on the total cost of regulations being promulgated by EPA. Although this is an historic paper, CRE believes that the Regulatory Cost Accounting principles developed in this document as well the economic and legal bases for a Regulatory Budget remain valid today. CRE encourages readers who have views on the Regulatory Budget to submit their comments under the Guest Columnist section of the site.

At Last: The Coming of the Regulatory Budget

Washington is abound with proposals to “regulate the regulators,” namely placing procedural constraints on the writing of regulations.

However basic structural changes in the regulatory system which would obviate the need for many of these procedural requirements by instituting new institutional changes in the regulate state are rare.

The most significant institutional feature of the regulatory state is the establishment of centralized regulatory review in the White House Office of Management and Budget.

Gattuso  Regulatory Budget

Using Net Benefit Accounts to Discipline Agencies: A Thought Experiment by Eric Posner

This paper considers the possibility of giving agencies “net benefit accounts,” which are devices for keeping track of the benefits and costs of regulations. When an agency issues a regulation, the net benefits of the regulation would be added to the account (or the net costs subtracted). Agencies would start with a surplus and be forbidden to issue regulations that in the aggregate would reduce the balance of the account below zero. Net benefit accounts have two purposes: (1) to reduce the cost of monitoring agencies’ regulatory activities; and (2) to provide agencies with carrots as well as sticks for issuing efficient regulation. The carrot takes the form, paradoxically, of the option to issue inefficient regulations that are close to the agency’s sense of mission.

Presidential Actions in Support of a Regulatory Budget

The publication of the Carter Regulatory Budget resulted in a number of subsequent actions by one or more Presidents.Bush (1). Jeff  Rosen states, C. George H.W. Bush Administration Regulatory Budgeting Proposals: “By the end of President George H.W. Bush’s first term, the regulatory budget concept had regained adherents and focus. President Bush’s 1993 budget submission to Congress endorsed the idea of a regulatory budget but advised gradual implementation.”

Controlling the Cumulative Costs of Regulation: Exploring Potential Solutions by Reeve T. Bull

Over three decades ago, the United States was at the forefront of developed nations in creating a centralized system for regulatory review and rationalizing regulatory policymaking through the use of benefit-cost analysis. As catalogued elsewhere on this site, the idea of centralized executive review of agency rules first began to take shape during the Johnson Administration, and it fully matured in its present form in the early days of the Reagan Administration. Presidents George H.W. Bush, Bill Clinton, George W. Bush, and Barack Obama have all fundamentally reaffirmed the basic framework President Reagan created, which involves benefit-cost analysis of pending rules and centralized review of significant regulations by the Office of Information and Regulatory Affairs (OIRA). Though the system that has emerged still provokes controversy, most have accepted the inevitability and desirability of some form of executive review.

October 6, 2015 email to: Rebecca Strauss Director, Renewing America Publications The Council on Foreign Relations

Ms. Strauss: Mr. Reeve Bull of the Administrative Conference of the US, in a forthcoming publication, highlighted your very deep insights into federal regulatory policy as contained in the Council Report. I was particularly impressed with the following statements at the beginning of your report: “In particular, the U.S. regulatory management system, or the way in which federal regulations are designed, could be improved. The system has changed little since the early 1980s and focuses almost exclusively on cost-benefit analysis before regulations are put into place, instead of in hindsight when it is clearer whether a regulation is working.”

Regulatory Policy Committee UK

One-in, two-out: statement of new regulation

Businesses say one of their biggest problems is the number of new regulations they have to comply with. It costs them time and money.

To reduce the number of new regulations for businesses, the government operates a ‘one-in, two-out’ rule. This helps prevent government policymakers from creating new regulations that increase costs for business and voluntary organisations.

Where policymakers do need to introduce a new regulation, and where there is a cost to business when complying with that regulation, departments have to remove or modify existing regulation(s) to the value of £2 of savings for every pound of cost imposed.

Better Regulation Framework Manual

This manual is intended for policy-makers, as well as economists, social researchers, lawyers and those specialising in better regulation. If you are developing or implementing policies that will regulate or deregulate business or civil society organisations (henceforth referred to as ‘business’), this manual contains all the guidance you will need to comply with the regulatory framework. The requirements set out within this manual together make up a framework that puts into practice the Government’s Principles of Regulation.

Regulatory Policy Committee

Provides the government with external, independent scrutiny of new regulatory and deregulatory proposals.

Regulatory  Budget Dudley 2016

Cumulative impact of regulation on farming in England

The analysis considers the combined financial impact on farming from the various regulatory changes which are currently planned; it sets out how the impacts are expected to vary between farm types and how they relate to existing farm costs and incomes. The estimated cost changes are based on assumptions taken from the relevant Impact Assessments which have then been applied to Farm Business Survey data in order to model the impacts at the farm level.

One-in, One-out: Statement of New Regulation

We consistently hear from business that regulation is a significant barrier to growth. It wastes valuable work time, requires constant administration and leads to real losses for business and the economy. In order to create the right conditions for business to grow, innovate and diversify, we must ensure that reducing regulation is a central theme in our work. We are committed to reducing the cost and volume of regulation on the economy – in particular the regulatory burden to business and civil society organisations.

One-in, One-out, Statement of New Regulation: 2011

The Government are committed to reducing the cost and volume of regulation on the economy – in particular the regulatory burden to business and civil society organisations. The Government’s strategy is to: • remove or simplify existing regulation that unnecessarily impedes growth; • introduce regulation only as a last resort; • improve the quality of any remaining new regulation; and • move to less onerous and less bureaucratic enforcement regimes where inspections are targeted and risk-based.

One-in, one-out rule regulations: 1 January to 20 December 2011

Overview of all the regulations implemented or planned to be implemented by Government departments in the period between 1 January 2011 and 20 December 2011. Also lists the regulations that will be removed during this period. Underlying data for this publication is also available in a machine processable format on the Transparency/Report Data webpage.

One-in, one-out rule regulations: 1 January to 30 June 2012

Overview of all the regulations implemented or planned to be implemented by Government departments between 1 January 2012 and 30 June 2012. Also lists the regulations that will be removed during this period. Underlying data for this publication is also available in a machine processable format on the Transparency/Report Data webpage.

One-in, one-out rule regulations: 1 July to 31 December 2012

Overview of all the regulations implemented or planned to be implemented by Government departments between 1 July 2012 and 31 December 2012. Also lists the regulations that will be removed during this period. Underlying data for this publication is also available in a machine processable format on the Transparency/Report Data webpage.

One-in, one-out: fourth statement of new regulation – July to December 2012

Lists regulations scheduled to come into force between 1 July and 31 December 2012 that are included in the government’s ‘one-in, one-out’ rule (now ‘one-in, two-out’). It also lists the regulations that we will remove during this period.

This is published every 6 months to inform businesses about when regulations affecting them will be coming into force.

It provides an overview of the net costs and benefits to business and civil society organisations and estimates that the measures that will be introduced this year will reduce burdens on businesses by an £0.3 million per year.

The costs and benefits of Defra’s regulations

These reports summarise progress so far on assessing all of Defra’s regulations that affect businesses or civil society.

They give an initial picture of the costs and benefits to business of Defra’s regulations and which sectors are most affected.

These assessments are part of a wider Defra programme to improve the evidence supporting regulatory reform.

One-in, two out: sixth statement of new regulation – July to December 2013

Lists regulations scheduled to come into force between 1 July and 31 December 2013 that are included in the government’s ‘one-in, two-out’ rule. It also lists the regulations that we will remove during this period.

This is published every 6 months to inform businesses about when regulations affecting them will be coming into force.

The net ‘one-in, two-out’ saving to business between 1 January and 31 December 2013 is forecast to be £64 million. The cumulative reduction since the government introduced the ‘one-in, one-out’ rule, in January, and subsequently ‘one-in, two-out’, is forecast to reduce the net annual regulatory cost to business by around £931 million by December 2013.

One-in, two-out: seventh statement of new regulation – January to June 2014

Lists regulations scheduled to come into force between 1 January and 30 June 2014 that are included in the government’s ‘one-in, two-out’ rule. It also lists the regulations that we will remove during this period.

This is published every 6 months to tell businesses when regulations affecting them will be coming into force.

The ‘Seventh statement of new regulation’ sets out the:

  • incoming regulation that the government intends to implement over the next 6 months
  • our performance under one-in, two-out up to the end of 2013

 

From 1 January 2014 to 30 June 2014 the government intends to bring in 73 measures (16 regulatory, 27 deregulatory and 30 zero net cost). The net cumulative saving to business from 1 January 2011 to 31 December 2013 is currently around £1.2 billion.

Controlling the Cumulative Costs of Regulation: Exploring Potential Solutions by Reeve T. Bull

Over three decades ago, the United States was at the forefront of developed nations in creating a centralized system for regulatory review and rationalizing regulatory policymaking through the use of benefit-cost analysis. As catalogued elsewhere on this site, the idea of centralized executive review of agency rules first began to take shape during the Johnson Administration, and it fully matured in its present form in the early days of the Reagan Administration. Presidents George H.W. Bush, Bill Clinton, George W. Bush, and Barack Obama have all fundamentally reaffirmed the basic framework President Reagan created, which involves benefit-cost analysis of pending rules and centralized review of significant regulations by the Office of Information and Regulatory Affairs (OIRA). Though the system that has emerged still provokes controversy, most have accepted the inevitability and desirability of some form of executive review.

Regulatory ‘Pay Go’ Rationing the Public Interest by CPR Member Scholars

Attacks on regulation have become commonplace in Washington, D.C., and on the campaign trail. Advanced by conservative politicians and industry advocates, these attacks claim that regulations protecting worker safety, product safety, the food supply, the environment, and more are overly burdensome on industry. Regulatory opponents argue that such environmental, health, and safety protections should be rolled back, and that more obstacles should be added to the regulatory process so that future regulations are more difficult to adopt. With this latter idea in mind, regulatory opponents in Congress have sought to translate their attacks on regulation into legislative proposals that, if enacted, would subvert the process by which regulatory agencies carry out their statutory mission of developing and implementing rules. The narrative—not to be mistaken for fact—underlying virtually all of these proposals, including the Regulatory Accountability Act, the Regulations from the Executive in Need of Scrutiny (REINS) Act, and the Regulatory Freeze for Jobs Act, is that a large-scale rollback of regulations protecting public health and the environment is vital to the nation’s economic recovery.

Market Corrective Rulemaking: Drawing on EU Insights to Rationalize U.S. Regulation by Reeve T. Bull

When justifying the government’s role in intervening in the free market, economists and legal scholars alike point to the problem of “market failures”: laissez-faire capitalism may not produce optimal outcomes in certain cases, and government interventions can promote overall market efficiency. The existence of such market failures is not terribly controversial; the question of whether government regulators can correctly identify these flaws and devise appropriate solutions, by contrast, is significantly more contentious. Unfortunately, under the existing regulatory framework, government officials are not especially well positioned to make these difficult determinations. Congress does not, as a general matter, consider the economic costs and benefits of statutes designed to correct perceived market flaws. Administrative agencies generally do consider these costs and benefits, but they seldom carefully reassess existing interventions and often lack the statutory authorization to tailor regulatory programs to respond to changing market forces. The unfortunate result of this dynamic is partisan gridlock and regulatory inertia: conservatives in Congress refuse to authorize new regulatory programs, fearing that any such intervention will prove impossible to reverse, and progressives strongly defend existing market interventions, fearing that acknowledging any inefficiencies will validate the antiregulatory narrative.

OIRA, The DQA, And The Control Of The Cumulative Cost Of Regulation

CRE has three regulatory objectives:

  1. Restore OIRA’s staff level to its original level of 90
  2. Subject Independent Agencies to Centralized Regulatory Review
  3. Develop a Mechanism to Control the Cumulative Cost of Regulations

If Objective 3 is accomplished Objectives 1 and 2 will follow. OIRA is ideally situated to be the agency in charge of the implementation of a mechanism to control the cumulative cost of regulations.  OIRA is the natural counterpart to OMB’s BRD (Budget Review Division) which is in charge of the preparation of the federal budget.

The Cumulative Impact Of Regulatory Cost Burdens On Employment by Sam Batkins, Ben Gitis

American Action Forum (AAF) research finds that for every billion dollars in regulatory compliance, affected industry employment declines by 3.6 percent. In two previous studies, AAF examined regulations with significant effects on small businesses and billion-dollar regulations. This study is far more comprehensive than the previous iterations, examining approximately 150 regulations during a twelve-year period. The interaction between regulation and industry employment is complex, and it’s doubtful that any one regulation can significantly affect employment. However, AAF research finds that the total cost of all regulatory compliance is associated with lower industry employment. The figure below details how cumulative regulatory costs affect industry employment.

EPA Fears Proposal to Tally Costs Will Results in “Regulatory Budget”

Draft legislation from the Office of Management and Budget, which would require federal agencies to make estimates of the costs of complying with their regulations, raised concern within the Environmental Protection Agency that the plan would be the first step toward a regulatory budget.

Carter Prototype  “In 1979 OMB published the first regulatory budget and supporting regulatory cost accounting act.”

The concept of a Regulatory Budget has been debated for many years. CRE is making available to the public a Regulatory Budget developed by OMB over 20 years ago for EPA. The document includes not only an analysis of the economic and legal foundations for a Regulatory Budget but also provides recommendations for the imposition of specific numeric caps on the total cost of regulations being promulgated by EPA. Although this is an historic paper, CRE believes that the Regulatory Cost Accounting principles developed in this document as well the economic and legal bases for a Regulatory Budget remain valid today. CRE encourages readers who have views on the Regulatory Budget to submit their comments under the Guest Columnist section of the site. 

Regulatory Cost Accounting Act of 1980 (Proposed)

Restraining the Regulators: Legal Perspectives On A Regulatory Budget For Federal Agencies by Lance Wood et al

The cry for regulatory reform presently resounds loud enough to be likely to bring about significant political action. One potential form such action could take is the development of regulatory budget legislation. Senate Bill 51 and House Bill 76, both introduced in the ninety-sixth Congress, were identical regulatory budget bills calling for the gradual imposition of limits on the costs of compliance that federal regulatory agencies could impose of the non-federal sector. This novel means of indirectly limiting federal regulators has been the sources of much political discussion but little or no legal analysis.

Congressional Reaction to the Regulatory Budget

Historians will probably conclude that the most permanent accomplishment of the Reagan Administration is its establishment of a regulatory review process in the White House Office Of Management and Budget.

Message to the Congress on the Publication of the Regulatory Program of the United States Government

The publication of The Regulatory Program of the United States Government marks a major milestone in our continuing effort to make government more accountable to the American people and more responsive to their needs. This document presents, for the first time, a comprehensive program of regulatory policy to be carried out over the coming year. Regulations are a feature of almost every government program. Though many regulations accomplish worthwhile ends, we should not forget the huge hidden costs they entail. The Federal government mandates tens of billions of dollars of expenditures every year — dollars paid for by the people but not included in any of the Federal budget accounts, not appropriated by the Congress, and not constrained by any spending limits.

Senate Hearings on a Regulatory Budget

Accounting for the True Cost of Regulation: Exploring the Possibility of a Regulatory Budget

The Committee on Homeland Security and Governmental Affairs and the Committee on the Budget

Budget Committee to Hold Dec. 9 Hearing on Regulatory Budgeting

WASHINGTON D.C. – Senator Mike Enzi (R-WY), Chairman of the Senate Budget Committee, will hold a hearing Wednesday, December 9, 2015 at 10:30am focused on moving to a stronger economy through regulatory budgeting.  Testifying will be Dr. John Graham, Dean, School of Public and Environmental Affairs, Indiana University, Dr. Jerry Ellig, Senior Research Fellow, Mercatus Center, George Mason University, and Mr. Robert Verchick, Chair, Environmental Law, Loyola University New Orleans.

A Reply: The Regulatory Budget Takes Form

In their A rticle, The Regulatory Budget Revisited, Jeffrey Rosen and Brian Callanan write, “There is good reason to expect political actors to rely increasingly on regulation to ‘fund’ major new government initiatives. Regulatory analysts are witnessing a reliance on regulation to accomplish what would be nearly impossible in the taxing and spending arena in Congress. Instead of Congress expanding the Earned Income Tax Credit to address inequality and poverty, the Obama Administration has opted to push for a minimum wage increase, expand wages for government contractors, and modify overtime protections for previously exempt employees. Rather than Congress ushering through formal legislation to ease the process for joining a union, the National Labor Relations Board (NLRB) has finalized a process for expedited unionization and expanded the definition of “joint employer” for the specific aim of increasing union rates. Instead of Congress imposing a formal price on carbon or a capand-trade system for greenhouse gas emissions reductions, the Environmental Protection Agency (EPA) and other agencies have regulated emissions and efficiency standards, thus bypassing a legislative route but increasing the likelihood of a court challenge curtailing this regulatory approach.

A Regulatory Budget and a Strategic Regulatory Agenda: Twin Reforms for More Strategic, Integrated and Democratic Regulatory Governance by G. Bruce Doern

Approaches to the development of new regulations have been improved in recent years, but they remain weak on addressing three central problems of regulatory governance. First, the overall coordination and integration of the various regulations remains very difficult because there is no strategic cross-governmental regulatory agenda. Second, the full cost of regulations – the aggregated public administrative costs coupled with the much larger ―hidden‖ costs to companies, civil society organizations, and citizens – is not yet transparent to governments and stakeholders. Finally, no mechanism exists to constrain the costs of regulations in an integrated, systematic, and transparent fashion so as to help maximize the benefits of regulation.

Testimony of Richard J. Pierce, Jr. Lyle T. Alverson, Professor of Law, The George Washington University

Thank you, Chairmen Johnson and Enzi, Ranking Members Carper and Sanders, and distinguished Members of the Senate Committees on the Budget and on Homeland Security and Governmental Affairs, for the opportunity to testify today on The True Cost of Regulation: Exploring the Possibility of a Regulatory Budget. My name is Richard J. Pierce, Jr. I am Lyle T. Alverson Professor of Law at the George Washington University School of Law and a member of the Administrative Conference of the United States. For 38 years my teaching, research, and scholarly writing has focused on administrative law and government regulation. I have written 125 articles and 20 books on those subjects. My books and articles have been cited in scores of judicial opinions, including over a dozen opinions of the United States Supreme Court.

Considering the Cumulative Effects of Regulation by Susan Dudley

Longstanding executive and legislative directives require agencies to analyze the expected impact of new regulatory requirements before they are issued. While important, this ex-ante regulation-by-regulation analysis may not account for the cumulative effect of regulations on society or specific sectors of the economy.  As OMB notes, “regulated entities might be subject to requirements that, even if individually justified, may have cumulative effects imposing undue, unduly complex, or inconsistent burdens.”

‘Regulatory Budget’ Would Tally Effects of Rules by Chuck McCutcheon

Critics who argue that regulations are harmful want to bring transparency to the process by highlighting the impact of rules. A “regulatory budget,” they say, would provide a detailed public accounting of the true costs of regulation. But consumer groups and some scholars say the idea is unworkable.

Canada Implements A Regulatory Budget, Early Lessons Learned by Laura Jones

Earlier this year, Canada made news when it became the first country in the world to legislate a hard cap on regulations. It’s a move that may surprise Americans who see Canada as a country that embraces, for better or worse, bigger government. The new federal law requires that for every new regulation introduced, one of equivalent burden must be removed. Remarkably, the legislation had nearly unanimous support.

The Regulatory Budget by Christopher C. DeMuth

A variety of policies for constraining the private costs of government regulation have been put forth in recent years, and a few have been put in place. The most prominent are the executive branch programs, established by President Ford and expanded by President Carter, aimed at encouraging the regulatory agencies to pay greater heed to the costs their decisions impose on the economy. Under these programs the agencies are required to analyze the costs and benefits of major new regulations, and their analyses are reviewed and criticized by two supervisory groups operating out of the Executive Office of the President-the Council on Wage and Price Stability (CWPS) and the Regulatory Analysis Review Group (RARG).

Promise and Peril Wayne Crews

A More Demanding Standard: The Brown-Bentsen Bills Clarence J. Brown

Public reaction to burdensome regulation may turn out to be for the current Congress what Proposition 13 was to taxes and deficits in the last Congress-a force demanding change in government policy. Today, the cumulative Federal Register fills fiftytwo large bookshelves and totals over 800,000 pages. The stack of volumes has grown in the past twenty years from ankle level to higher than I can reach-and I stand over six feet four inches tall. We are drowning in the flood of printed regulations.

Truth in Regulatory Budgeting by Lawrence J. White

Government programs are expected to bring benefits; they also have costs. For many of these programs, the total (or social) costs imposed on society are largely the same as their administrative costs and thus are largely measured by the fiscal budget-over which there are direct legislative controls. But this is not true for regulatory programs. In their case, most of the social costs are not reflected in the fiscal budget. Instead, they are borne by the private and public organizations being regulated and are, therefore, not subject to legislative controls. This situation has become a matter of growing concern. With increasing frequency in recent years, legislation authorizing a new regulatory program has stated broad goals but then given the agency broad discretion on implementation. There are no direct constraints on the magnitude of the cost burden that can be imposed on society to achieve these goals.

Proposals for a Regulatory Budget by B. Ward White

In recent years there has been increasing discussion of and concern about the costs of government regulation. Federal regulatory programs have expanded dramatically and now encompass activities that, in the past, has been reserved to state and local governments, private sector business, or to individuals themselves. Commensurate with the growth in the federal regulatory activity, there have been increasing costs stemming from heightened levels of government intervention. This observation has led to expressions of concern that perhaps the scope of federal regulatory activity is too broad, the federal government has become too large, and the costs of many federal regulatory programs far exceed the benefits.

Regulatory budgeting: A bad idea whose time has come? by R.T. Meyers

Advocates of regulatory relief propose a budget that would annually cap regulatory costs. But emulating fiscal budgeting would be much more difficult than they envision. An arbitrary macrobudgetary constraint would have to be selected, and the potential scope of the regulatory budget would be vast. The process of regulatory budgeting would be very-time consuming, and could increase micromanagement by the Congress. Estimating regulatory costs would be challenging, and ignoring regulatory benefits would be unfair and inefficient. A preferable alternative to regulatory budgeting would be to expand the Government Performance and Results Act to include cost-effectiveness reviews for regulations.

Implementing a regulatory budget: Estimating the mandated private expenditure of the Clean Air Act and Safe Drinking Water Act amendments by Harvey S. James Jr.

A regulatory budget is one of the most promising proposals designed to constrain the costs of regulation.  Like a conventional fiscal budget that restricts total spending, a regulatory budget would provide an upper limit on the total costs a regulatory agency can impose on society. As long as the agency operates within its regulatory budget, it would be allowed to issue new rules and enforce its regulations. When the social costs of an agency’s activities reach or exceed the cost ceiling, however, the agency would be required to modify new or existing rules ^ or even eliminate existing ineffective regulations – to meet the budget constraint.

The Regulatory Budget by D. Roderick Kiewiet

Whenever an agency of the federal government proposes a new rule or regulation intended to enhance health, safety, or environmental quality, decision makers within that agency have presumably concluded that the benefits wrought by that new rule or regulation will exceed the costs of complying with it. Over the years, the regulatory proposals made by these agencies have increasingly become subject, at least formally, to executive branch oversight. They been required to provide more evidence, hopefully generated by better data and more rigorous analysis, in making the case for their proposals. The most important milestone on the road toward greater executive branch oversight was Executive Order 12291, issued by the Reagan Administration in early 1981. This order required agencies to formulate and to submit to the Office of Management and Budget, for review, a Regulatory Impact Analysis for all proposed rule changes that would have “an annual effect upon the economy” of more than $100 million. These reviews have subsequently become the responsibility of a group within the OMB, the Office of Information and Regulatory Affairs (OIRA). Proposals for which a positive benefit/cost ratio could not be generated, or which duplicate existing rules, or which could be supplanted by a lower cost means for achieving the same results, can be blocked by OIRA until its concerns are addressed.

A Primer on Regulatory Budgets by Nick Malyshev

A widespread complaint raised by businesses and citizens in OECD countries concerns the amount and complexity of government regulation. In many policy areas, regulatory requirements have become extremely complex and cumbersome, and costs imposed on the economy as a whole are significant. Moreover, when excessive in number and complexity, regulations can impede innovation, create unnecessary barriers to trade, investment and economic efficiency, and even threaten the legitimacy of the rule of law.

Fact Sheet on Regulatory Budgeting Regulatory Budgeting Would Put Public Health and Safety Protections on the Chopping Block

We shouldn’t have to sacrifice existing safeguards to protect us from new threats, but that’s exactly what regulatory budgeting would require. Regulatory budgeting treats regulatory costs to industry like a fiscal budget that is set and limited. Before a new regulation could be enacted, an existing regulation that costs the same or more would have to be repealed. As a result, the regulatory budget models currently under consideration would put long-established safeguards and protections that have immense benefits to society on the chopping block.

Toward a Regulatory Budget by Fred Thompson

There is little doubt that government regulation in America could be improved. It often does little good; it always costs a lot. The Organization for Economic Cooperation and Development, for example, recently reported that out environment is still deteriorating despite twenty-five years of cleanup effort, although total cleanup costs (both in the aggregate and as a percentage of GDP) are higher than in any other country, in part because our cleanup effort are less cost-effective.

Hearing On “Moving Toward A Stronger Economy With A Regulatory Budget”

Chairman Enzi, Ranking Member Sanders, and Members of the Committee, thank you for inviting me here today to share with you my concerns about regulatory budgeting and to explain why I think this strategy could hurt everyday Americans while producing no benefit to the overall economy. As a former official at the U.S. Environmental Protection Agency (EPA), I’m very proud of the professionalism and resourcefulness of America’s regulatory agencies. And, as a law professor, I know that our regulatory system can be much improved. But rather than focusing on artificially imposed caps, I think we would do better by instead providing executive agencies with the tools and resources they need to write the smartest, most effective rules possible. Agencies should, of course, have the incentives and the resources to identify deficient rules already on the books and to fix or remove them. (And, in fact, periodic retrospective review, is already required of most agencies.)1 But a regulatory budget—whose fixation is on quantity, not quality—will not lead to smarter regulations, a stronger economy, or a healthier and more secure citizenry. It will stand against those those things, making the concept, however well intended, ultimately counter-productive.

A Regulatory Budget and the U.S. Economy

Our topic today is a promising reform of the federal regulatory system called the “regulatory budget.” In the late 1970s, when the regulatory reform movement began to gather steam, reformers noticed an oddity about how the federal government operates. If the costs of a federal program are incurred within the federal budget, then those costs are subject to scrutiny in the normal appropriations process. But, if instead, federal agencies impose costs on the private sector and/or state/local governments, those costs are “off budget” and thus not considered a part of the federal budgetary process. Why, reformers asked, should $1 billion in compliance costs on industry (investors, workers and consumers) be treated differently than $1 billion in federal budgetary outlays that are typically financed by taxes?

Accounting for the True Cost of Regulation: Exploring the Possibility of a Regulatory Budget

Chairman Johnson, Chairman Enzi, Ranking Member Carper, Ranking Member Sanders, and distinguished members of the Committee, thank you for inviting me to testify at this joint hearing on “Accounting for the True Cost of Regulation: Exploring the Possibility of a Regulatory Budget.” I am Director of the George Washington University Regulatory Studies Center, and Distinguished Professor of Practice in the Trachtenberg School of Public Policy and Public Administration. 1 From April 2007 to January 2009, I oversaw executive branch regulations of the federal government as Administrator of the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB).

Outcome-Based Regulatory Decisions Require Congressional Commitment by Jerry Ellig

Good morning Chairman Enzi, Ranking Member Sanders, and members of the committee. Thank you for inviting me to testify today. I am an economist and research fellow at the Mercatus Center, a 501(c)(3) research, educational, and outreach center affiliated with George Mason University in Arlington, Virginia. I’ve previously served as a senior economist at the Joint Economic Committee and as deputy director of the Office of Policy Planning at the Federal Trade Commission. Decision makers—legislators as well as regulators—have a moral responsibility to make decisions about regulations based on actual knowledge of a regulation’s likely outcomes—not just hopes, intentions, or wishful thinking. A decision maker’s failure or refusal to acquire this knowledge before making a decision is a willful choice to act based on ignorance. For effective decision-making, Congress and regulators both need access to the best possible assessment of the likely results of prospective regulations and the actual results of regulations that are already in force.

What Would A Regulatory Budget Save? About $100 Billion by Sam Batkins

As support slowly builds for a regulatory budget in the House and Senate, it’s important to take note of the possible benefits of a proper cost accounting for the regulatory state. A high-end scenario, for a true one-in-one-out budget, could save the nation $98.7 billion in annual regulatory burdens.

Truth in Government: Beyond the Tax Expenditure Budget by Julie Roin

President Bush sparked a minor firestorm within the Beltway by including these words in his fiscal 2002 budget analysis. This was not because the tax expenditure budget— which sets out the implicit cost of various deductions and provisions of the tax code—was viewed as beyond criticism. Various aspects of the tax expenditure budget have been attacked since its inception, and the particular objection raised by the 2002 budget document—the absence of a normative baseline for determining what constitutes a tax expenditures —was among the earliest to surface. Rather, it was the language of the attack that seemed remarkable. It sounded to many like the opening salvo in a battle to overturn the Congressional requirement that such a budget be constructed and published as part of the annual budget.

Regulatory Budgeting: Lessons From Canada by Sean Speer

American conservatives have not tended to look to Canada for inspiration. Canada has been derided as a land of big government, high levels of taxation and, of course, single-payer health care. Pat Buchanan famously called it ”Soviet Canuckistan” in 2002.

But Canada deserves a second look. It has been home to some interesting developments in recent decades.

Toward A Regulatory Budget

There is little doubt that government regulation in America could be improved. It often doesn’t do much good; it always costs a lot. The Organization for Economic Cooperation and Development, for example, recently reported that our environment is still deteriorating despite 25 years of cleanup effort, although total cleanup costs (both in the aggregate and as a percentage of GDP) are higher than in any other country, in part because our cleanup efforts are less cost-effective (The Economist, October 21, 1995: 32-33).

At Senate Hearing, CPR’s Verchick Provides Sole Voice of Reason on Flawed ‘Regulatory Budgeting’ Proposal by James Goodwin

This morning, CPR President and Loyola University, New Orleans, Law Professor Robert R.M. Verchick testifies at a hearing convened by the Senate Budget Committee to examine a dangerous regulatory policy proposal known as “regulatory budgeting.”

As he explains in his testimony, regulatory budgeting represents a stark departure from the traditional focus of regulatory policy discussions, which have long been concerned with improving the effectiveness—or quality—of regulatory decision-making. Regulatory budgeting, by contrast, makes the total number—or quantity—of regulations the primary focus, relegating concerns of individual regulatory quality to a matter of secondary importance.

 

Exit to Regulatory Budget Website