Jeb Bush Wants to Get Tough on Regulations
Republican presidential candidate and former Florida governor Jeb Bush has just released a plan for regulatory reform. Though there are a few clunkers, many of his ideas are excellent. (I have had some experience on these issues; from 2009 to 2013, I helped oversee regulation under President Barack Obama, as Administrator of the Office of Information and Regulatory Affairs.)
Here’s a good one: A formal process for “spring cleaning” of regulations on the books. Bush proposes that every eight years, OIRA should review the costs and benefits of major regulations. More ambitiously, he wants to create an independent commission, focused on the cumulative costs of rules and identifying those that need to be modified or repealed.
The idea isn't entirely original; Obama has also adopted a process for retrospective review, which has produced billions of dollars in savings. But Democrats and Republicans should agree that much more remains to be done, and Bush deserves credit for proposing to build on Obama’s idea and formalize it. The idea of an independent commission has some risks (for one thing, who would be on it?), but it should receive serious consideration.
Another excellent reform: Bush wants to apply current restrictions on issuing new regulations, such as the requirement that the benefits of regulation justify its costs, not merely to the executive agencies (which are already covered) but also to independent agencies such as the Securities and Exchange Commission, the Federal Trade Commission and the Federal Trade Commission.
Ever since President Ronald Reagan, both Republican and Democratic presidents have declined to take this step, in part because they feared charges of presidential overreach. Bush has a bold idea, and a good one. It would impose desirable constraints on costly rulemaking from some of the nation’s most important institutions.
Also excellent: Reform the process of “sue-and-settle,” in which public interest groups sue federal agencies to force them to issue rules. In some cases, the agencies don't really disagree, but have refrained from acting in part because of political constraints. Once an agency enters into a settlement agreement, it's under a legal obligation to act within a specified amount of time.
That’s a problem, because the public may not get a sufficient chance to comment on the regulation, and because OIRA review will be limited by the settlement agreement. Bush wants to ensure a more vigorous process of public scrutiny and OIRA review before regulations are submitted to courts. That step would rein in unnecessary costs.
Some of Bush’s proposals are less meaningful than they sound. He proposes a “regulatory freeze,” which means he wouldn't allow publication of a new regulation from the Obama administration until it is approved by a member of his own Cabinet. Fine, but for an incoming president that’s standard stuff. Any new president, Republican or Democratic, is going to want to take a look at new requirements from an outgoing administration.
Two of Bush’s proposals are pretty bad. He endorses a “regulatory budget,” in which the costs of any new regulation must always be offset by reducing regulatory costs elsewhere. Of course cost control is important, but the proposal could block life-saving initiatives.
For any administration, the real goal should be to ensure that regulatory benefits exceed regulatory costs -- even if the total costs are well above zero. Suppose, for example, that the Department of Transportation is considering three regulatory proposals. Each of them would cost $100 million, but each would also produce $600 million in benefits (including the monetary value of preventing premature deaths on highways). The department should go ahead with all three, even though doing so would bust through a regulatory cost cap of zero (because the total cost, not considering benefits, would be $300 million rather than zero).
Bush also embraces the controversial bill, called the REINS Act, which would require Congress to approve, in advance, regulations with an annual effect of more than $100 million. The idea sounds great in theory, but it really wouldn’t be helpful.
One problem is that Congress has already enacted legislation authorizing those regulations; if not, they would be struck down in court. The other problem is that because of the difficulty of achieving a congressional consensus, the role of interest groups and the limits of time, a second layer of congressional authorization would effectively veto regulations that would save lives, reduce costs or both.
Bush insists the U. S. faces a “regulatory crisis in Washington,” but provides no support for that claim. Nonetheless, overregulation can be a real problem, and he’s offering some constructive ideas to deal with it. Whether Democrat or Republican, the next president should give those ideas careful attention.
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