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A New Approach for Regulatory Reform

On Tuesday, the Senate Homeland Security & Governmental Affairs and Senate Budget Committees held a joint hearing on “Accounting for the True Cost of Regulation: Exploring the Possibility of a Regulatory Budget.”  Homeland Security Chair Ron Johnson (R-WI) framed the discussion by saying, “Congress often doesn’t pass laws anymore – it passes frameworks, authorizing broad powers for regulatory agencies that are used to promulgate all kinds of rules and regulations.  While some of these regulations are necessary to implement the law, some are also beyond the scope of congressional intent and unnecessarily burden businesses and families. In 2014, according to the Competitive Enterprise Institute, each new law passed by Congress resulted in 16 new regulations. Unfortunately, this system benefits both Congress and the executive branch: Congress gets to hold at arm’s length any potential consequences of the laws it passes, and agencies are often given limitless authority to regulate.”
Johnson went on to say, “Congress needs to take control of the regulatory system and assume some accountability for the results…We need to find ways to force the federal government to be explicit about the economic costs it imposes on the country, incentivize agencies to seek continuous improvement of their existing rules, and put Congress on the hook for authorizing regulatory costs.”
In looking for a solution, the Committees heard about Canada’s “One-for-One” rule, the first such policy to be enacted by legislation, that calls for the elimination of an existing regulation whenever a new one is introduced that would impose administrative costs on businesses.  It remains to be seen whether the Senate will introduce legislation that follows the Canadian model but, on a personal note, I can report that the “one in-one out” approach has been successful for me in managing my closet.