Bloomberg View

Paul Ryan takes on red tape • The all-too-pre­dictable tragedy of Or­lando

Bloomberg Businessweek (Asia) - - CONTENTS -

There are few things worse than red tape, and in gov­ern­ment there’s plenty to go around. That’s why House Speaker Paul Ryan’s lat­est reg­u­la­tory re­form plan can’t be dis­missed en­tirely. Just mostly.

First, let’s look at the worth­while stuff. Mak­ing agen­cies co­or­di­nate bet­ter on rules that over­lap is a good idea, as is of­fer­ing longer pub­lic com­ment pe­ri­ods for the most sweep­ing reg­u­la­tions. It also makes sense to re­quire agen­cies to rou­tinely re­view reg­u­la­tions to en­sure they’re still nec­es­sary. And wider use of sun­set pro­vi­sions—rules that au­to­mat­i­cally ex­pire un­less agen­cies can show they’re still needed—could help re­duce reg­u­la­tory over­load.

The plan also con­tains more du­bi­ous ideas. It en­dorses the no­tion of the so-called reg­u­la­tory bud­get—ba­si­cally, cap­ping the num­ber of reg­u­la­tions any agency can is­sue (or re­quir­ing that any new rule be ac­com­pa­nied by the elim­i­na­tion of an old one). It’s an ap­peal­ing con­cept, and no doubt there are many use­less and out­dated reg­u­la­tions. But the way to go about prun­ing them is to judge each on its mer­its. And if the idea is to re­duce reg­u­la­tions, this pro­posal would have no ef­fect.

It’s also worth not­ing that the cost-ben­e­fit anal­y­sis Ryan is call­ing for—which is un­ques­tion­ably worth­while—is al­ready hap­pen­ing. Such anal­y­sis of new rules has taken place in the ex­ec­u­tive branch at least since Ronald Rea­gan was pres­i­dent, and the Obama ad­min­is­tra­tion has been par­tic­u­larly vig­i­lant about it. Ryan would re­quire such anal­y­sis by law and ex­tend it to the hand­ful of agen­cies (such as the Se­cu­ri­ties and Ex­change Com­mis­sion) where it’s not now the prac­tice.

The trick with reg­u­la­tory re­form—as with politics, for that mat­ter—is not to be naive about it. By ne­ces­sity, the process of rule-mak­ing strad­dles the line be­tween the pos­si­ble and the nec­es­sary. Some mem­bers of Congress will al­ways be dis­sat­is­fied with this or that reg­u­la­tion. That doesn’t mean they should have the right to re­write or elim­i­nate it. Congress needs

to rely on the ex­ec­u­tive branch to fur­ther de­fine and en­force the laws it passes.

That’s why Ryan’s com­ment when he in­tro­duced his plan is so wor­ri­some: “No ma­jor reg­u­la­tion should be­come law,” he said, “un­less Congress takes a vote.” Not only does this mis­un­der­stand Congress’s role, but it’s also tan­ta­mount to elim­i­nat­ing all new ma­jor reg­u­la­tion.

None of this is to say that Ryan is wrong to fo­cus his at­ten­tion on a scle­rotic and of­ten frus­trat­ing rule-mak­ing sys­tem. Just be­cause peo­ple dis­agree on the value of var­i­ous costs and ben­e­fits doesn’t mean cost-ben­e­fit anal­y­sis shouldn’t be per­formed as widely as pos­si­ble. The goal should al­ways be to base any reg­u­la­tion on the best in­for­ma­tion avail­able—and to re­assess it as that in­for­ma­tion changes.

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