Deregulatory Baby Steps

by Iain Murray on May 26, 2011

in Deregulate to Stimulate, Economy

In a welcome move, the White House announced this morning that a review of regulations by government departments had found 30 (count ‘em) regulations that could be abolished or pared back to ease burdens on business. This would, the White House crowed, give us a Twenty First Century Regulatory System. The regulations  the White House highlighted were:

  • The Occupational Safety and Health Administration (OSHA) is announcing a final rule that will remove over 1.9 million annual hours of redundant reporting burdens on employers and save more than $40 million in annual costs. Businesses will no longer be saddled with the obligation to fill out unnecessary government forms, meaning that their employees will have more time to be productive and do their real work.
  • EPA will propose to eliminate the redundant obligation for many states to require air pollution vapor recovery systems at local gas stations because modern vehicles already have effective air pollution control technologies. The anticipated annual savings are about $67 million.
  • The Departments of Commerce and State are undertaking a series of steps to eliminate unnecessary barriers to exports, including duplicative and unnecessary regulatory requirements, thus reducing the cumulative burden and uncertainty faced by American companies and their trading partners. These steps will make it a lot easier for American companies to reach new markets, increasing our exports while creating jobs here at home.

Erm, is that it? $40 million here, $67 there. Most of the 30 or so plans don’t have a dollar value attached to them, but let’s say those values are typical and the 30 plans will save $50 million each on average. That would reduce the nation’s regulatory cost bill by $1.5 billion.

That sounds like a lot, but on CEI’s estimates the annual cost of regulation to the U.S. economy is $1.75 trillion. The effect of these deregulatory efforts will barely register.  The agencies’ efforts would have to be two orders of magnitude higher to result in any significant dent in that figure.

A look at some of the plans suggests why this is. The plan from the Department of Commerce notes that its “discretion over the content of regulations is limited by law” and that therefore its “ability to modify, streamline, expand or repeal regulations unilaterally to carry out the [Executive Order] is similarly constrained.”

That is why deregulation has to start in Congress. Successive Congresses have told the administration to impose these burdensome regulations on the American people. Congress therefore needs to tell the administration now to remove them.

Meanwhile, the administration should also announce a regulatory freeze. No new regulations should be imposed on the American people until significant numbers have been “modified, streamlined or repealed.”

So, although this step is welcome, the administration and Congress need to recognize now — and proclaim publicly — that this is just the first step in a journey of many thousands of miles.

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