Opinion

The Case for Cutting Red Tape

 

The growing accumulation of federal rules that increasingly govern every facet of American life is a disturbing trend that holds consequences both for individual liberties and the health of the U.S. economy.

Not all regulations are bad, but the mountain of red tape – the Federal Register lists tens of thousands of pages of rules on everything from mortgages to dish washers – that American families and businesses must overcome on a daily basis too often serves to increase the cost of living and hinder investment while providing only questionable benefits.

There’s a better way. Reforming the federal rulemaking process would go a long way toward relieving the collective burden heaped on Americans by an ever-increasing federal administrative state.

Improving the regulatory process is not a new idea. Every president since the mid-1970s has attempted to reduce the regulatory burden. The Carter administration signed an executive order declaring that regulations should be as “simple and clear as possible,” and should “not impose unnecessary burdens on the economy, on individuals, on public or private organizations, or on state and local governments.”

President Clinton said in 1993 that the American people “deserve a regulatory system that works for them, not against them, a regulatory system that protects and improves their health, safety, environment, and well-being and improves the performance of the economy without imposing unacceptable or unreasonable costs on society.”

Even President Obama – not known for being shy about using executive authority – called for a comprehensive review of federal regulations with the goal of getting rid of outdated rules deemed harmful to the economy.

Writing in the Wall Street Journal, President Obama vowed to make it his mission to “root out regulations that conflict, that are not worth the cost, or that are just plain dumb,” and promised to get rid of “absurd and unnecessary paperwork requirements that waste time and money.”

“Our economy is not a zero-sum game. Regulations do have costs; often, as a country, we have to make tough decisions about whether those costs are necessary. But what is clear is that we can strike the right balance. We can make our economy stronger and more competitive, while meeting our fundamental responsibilities to one another,” President Obama wrote at the start of 2011.

We couldn’t agree more. Unfortunately, despite presidential orders to the contrary, the regulatory state has continued to grow.

New rules are constantly being worked on – cumulatively more than 90,000 pages of new rules have been published in the past 20 years – but few if any are ever repealed. The cost of complying with all of these regulations is staggering. Americans spend almost $1.9 trillion a year simply to comply with the avalanche of rules flowing from Washington.

It’s time to take another look at the rulemaking process. To reinvigorate our economy, the rules, orders, and decrees from federal agencies must be simplified, improved, and potentially rescinded when they have outlived their usefulness.

We need a regulatory approach that also respects the role of state and local governments. In contrast to the situation in Washington, progress is being made today at the state level to eliminate unnecessary regulations. The successful work of governors and state legislatures should serve as a model for Congress and the next president.

Although the political climate has become increasingly partisan in recent years, improving the regulatory process is one issue where there is bipartisan support in Congress. The Senate Regulations Caucus includes legislators from both parties who understand the need for increased oversight and transparency in the rulemaking process.

Caucus members – Sens. Mike Rounds, R-S.D.; Joe Manchin, D-W.V.; Ron Johnson, R-WI; and Angus King, I-ME – are rightly taking a broad approach to reform, focusing on how rules are written and implemented rather than on specific regulations that one side or the other may find objectionable. By working in a collaborative fashion on regulatory reform, the caucus hopes to avoid debate devolving into partisan stonewalling.

While moving smaller pieces of regulatory improvement will take more time and effort, the end result will be well worth it if it leads to a reduction in the regulatory burdens on small businesses and individual families that both parties support and that the president signs.

Sensible regulations are necessary to protect the public health and safety, but too often the rules handed down from Washington are simply burdensome, often redundant, and sometimes absurd. The next administration, regardless of party, should work with Congress to make cutting red tape a priority to inspire faith in our economic recovery.

Tim Doyle is the vice president of policy and general counsel at the American Council for Capital Formation (ACCF).

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