Time for a Regulatory Budget
America’s regulatory burden has thrived in solitude because it’s uncounted, and therefore uncontrolled.The first step to addressing it is to begin counting. America needs a federal regulatory budget.
According to the Competitive Enterprise Institute, which valiantly tries to quantify the officially uncounted, federal regulations cost the U.S. $1.9 trillion in 2016. That staggering figure equals half 2016’s federal spending ($3.853 trillion) and almost 60 percent of federal revenues ($3.268 trillion).
The regulatory burden has grown tremendously. Unable to count long-past costs, we count pages: In 1936, The Federal Register had 2,620 pages; in 2016, it had 95,894. Ominously, that nearly 40-fold increase will likely continue — without official counting.
Fortunately, the template for official counting already exists: Congress’ official budgetary procedures over the last four decades. Congress created the Congressional Budget Office in 1974 to systematize its budgeting and compete with the presidency’s greater technical resources. Both CBO and OMB could be mechanisms to begin a regulatory budget process.
Like spending, regulation must first be tabulated; however, doing so would be different. Unlike spending, which is calculated after the fact, as dollars go out, measuring regulations’ cost would require CBO and OMB’s other major function: Estimating.
A regulatory budget would require estimating past (the existing regulatory burden) and future (proposed regulations). While with spending, “after” is more arithmetic, and “before” more art, both would be art with regulations.
While some regulatory estimation is done now, it does not encompass the entire regulatory burden; it is more focused on proposed regulations to determine if they generally exceed defined thresholds for greater scrutiny. There is an obvious problem with such an approach: Limiting estimating to new, avoids the whole. Missing the forest for the trees is always a problem, but particularly with regulations: America shoulders the whole, not just the new.
A budget would help address regulations’ two major issues: The obvious, affordability, and the overlooked, accountability.
America’s private sector bears the cost of regulation. Regardless of good intention, costs mount. Regulations have been aptly called an invisible tax. As with taxes, while often justified by some programs deemed worthwhile, they still subtract from private individuals’ means. The private sector — individuals and businesses — can do less than they would otherwise — save, invest, and spend.