Policymakers from Obama down declare war on regulations, but will anything change?
Today's Wall Street Journal carries an editorial from President Obama entitled, "Toward a 21st-Century Regulatory System." The piece lays out the President's plan for tackling regulatory reform and cleaning out regulations that no longer serve a purpose but only impose a cost on the business community.
This Executive Order from the White House (summarized in the WSJ op-ed) presents an interesting juxtaposition because the Obama Administration has been the most regulating administration in history -- and Obama is only halfway through his first term.
Over the past year, often lost amongst the rancor surrounding the Bush-era tax cut debate, emerged an impression that the Obama White House is not friendly to business. Many articles in national media hinted that the President was looking for a way to make amends to the business community without compromising on the President's more liberal beliefs.
It will be interesting to see how this Executive Order pans out. This has been done before. President Clinton issued Executive Order 12866, which is curiously similar to the EO issued today.
Obama's EO is focused on:
- Agencies must consider costs and benefits of regulations and choose the least burdensome alternative
- Agencies must encourage public participation in the rulemaking process
- Agencies must harmonize and simplify regulations in order to reduce costs
- Agencies must consider low-cost approaches that reduce burdens and keep flexibility
- Regulations must be guided by objective scientific evidence
- Existing regulations must be reviewed to determine their viability
- Agencies should assess all costs and benefits of alternatives, including the alternative of NOT regulating
- Enhance planning and coordination with respect to new and existing regulations
- Making the regulatory process more accessible and open to the public
- Agencies must consider low-cost alternatives
- Agencies shall base its decisions on the best scientific, technical, economic and other information concerning the need for, and consequences of, the intended regulation
- Agencies shall avoid regulations that are inconsistent, incompatible, or duplicative of other Federal agencies
The point is that the two EO's are very similar in scope. The Obama EO contains little more than what Clinton's did from 1993. And Clinton's EO modified Reagan's Executive Order 12291, which modified two of Carter's Executive Orders on reducing federal paperwork and improving the federal regulatory system. Both Presidents Bush also issued their own EOs on regulatory reform.
Closer to home, Governor Gregoire issued her own Executive Order last year to suspend all non-essential rulemaking activity for 2011.
But will all these executive orders amount to actual regulatory relief (much less, long-term reform)?
It is too soon to assess whether the Governor's EO has had any benefit. In fact, the news shortly after her decision focused on how many new rules were still moving forward despite the Order.
And nationally, despite decades of regulatory reform efforts from the executive branch, we are still seeing thousands of new or amended rules spilling out from federal agencies every year.
Wayne Crews at the Competitive Enterprise Institute, who authors the fantastic "Ten Thousand Commandments," points out that in the past year there are already almost two hundred more rules that businesses have to comply with and that "major" rules, which cost more than $100 million annually, have increased as well. This is the wrong direction for those interested in issuing more effective rulemaking.
But it's not enough to just say "no" to any and every existing or proposed rule. That is why Washington Policy Center has worked in regulatory reform for several years, asking for structural reform of the way that the rulemaking system is set up.
Our "Strengthening our state's Regulatory Fairness Act," from last fall looks at several ways to beef up oversight, transparency and interaction with stakeholders, but gives the process more teeth than existing statutory or regulatory law.
There are several pieces of legislation in this early Legislative Session that address regulatory reform and are worth discussing.
- HB 1150 extends the window of opportunity for small businesses to come into compliance if they violate minor agency rules
- HB 1151 seeks to restrict regulatory authority to specific legislative language -- no more broad grants of regulatory authority
- HB 1156 seeks to lengthen the Governor's moratorium on agency rulemaking for another two years
- HB 1068 would require the Governor's signature on major agency rules
- HB 1341 would give require that one legislative session would have to expire in between a rule's adoption and implementation
- Mandatory sunsets on agency regulations -- agencies should have to justify regulations in place every so often
- Enable the legislature to vote up/down on major agency regulations
- Implement an objective small business advisory group that is tasked with giving feedback to agencies
- Convert the current Office of Regulatory Assistance to an "office of regulatory review and reform"
- Require better outreach of pending rules, the state register is insufficient
- Small Business Economic Impact Statements are rarely triggered as existing language contains many loopholes for agencies to avoid conducting one
- Implement a supermajority requirement for extremely costly mandates
- Reject excessive grants of legislative authority from the legislature to agencies (HB 1151 above tackles some of this problem)