Many see President Obama's push to toss out useless regulations as a positive step in clearing the federal government's bureaucratic cobwebs. But critics say his January executive order directing agencies to review old regulations for possible changes or even repeal falls short. Maybe it's time to consider a one-in, one-out approach, like the policy adopted recently in the United Kingdom.
For every new rule British government ministers propose, they are required to identify an existing regulation that can be removed, if adding the rule would impose costs on businesses. When the initiative was announced, U.K. Business Secretary Vince Cable said the goal was to make regulation a last resort and alleviate the burden red tape places on businesses.
According to Sen. Mark Warner, D-Va., the U.S. government should consider a similar policy. In a December 2010 Washington Post column, Warner said the current federal regulatory framework actually favors federal agencies that churn out new regulations by rewarding them with additional budgetary resources and higher profile status. "There is no process or incentive for an agency to eliminate or clean up old regulations," he wrote.
Framing the one-in, one-out policy as a pay-as-you-go system, Warner says he is drafting legislation that would require agencies to identify and eliminate one existing regulation for every new one they want to add. This would require agencies to catalog their existing regulations and estimate the financial impact of each one on businesses. Given the data already available, that estimate is likely to be jarring for some.
In its 2010 report to Congress on the impact of federal regulations, the Office of Management and Budget notes that the federal government has issued more than 132,000 final rules since 1981, and about 1,200 of those rules have an economic impact of more than $100 million-each. The Heritage Foundation is warning that the burden of regulation on the American public is increasing at an "alarming" rate, noting in a recent study that an "unprecedented" 43 major new regulations were finalized in 2010, and the cost of these rules could exceed $26.5 billion.
Under Obama's order, agencies will develop a plan within 120 days to periodically review significant regulations and identify those that are "outmoded, ineffective, insufficient, or excessively burdensome" with an eye toward modifying, streamlining, expanding, or repealing them. The order also requires agencies to perform cost-benefit analyses for new rules.
But what is holding administration officials back from making the leap to a one-in, one-out method?
Even Warner acknowledges it would take more than a snap of the fingers to implement a pay-as-you-go regulatory system. It would require designing a transparent and credible assessment of how each regulation affects businesses and the economy. Under his recommendations, OMB, Congress and GAO all would play a role in reviewing agencies' evaluations and recommendations for the elimination of major regulations.
This hasn't exactly been easy for Britain either. Steve Hughes, an economic adviser for the British Chambers of Commerce, told BBC it was "like turning a tanker around."
In some ways, the process would be similar for the United States. Evaluating hundreds of thousands, maybe millions, of regulations-then navigating the political minefield that would accompany the repeal of many-would require tremendous resources. But the president's order gives agencies substantial leeway to determine how to conduct reviews, which probably means the effort will be put on the back burner.
It seems a tall order to allocate limited resources to such a nonpressing issue. But politically, it might be prudent to consider some of the more drastic recommendations, including Warner's, for trimming the fat off the regulatory books.
Elizabeth Newell covered management, human resources and contracting at Government Executive for three years.