Banishing regulatory ‘dark matter’
Cutting through the confusing nomenclature helps to shrink the bureaucracy
Turns out there aren’t just too many regulations, but too many different kinds of them to track. Congress has stalled out on passing regulatory reform legislation and sending it to President Trump’s desk, in spite of the significant achievement early in the 115th session of disapproving 14 Obama-era “midnight rules.”
As regulatory liberalization ideas bounce around but stall, and as one inventories rules as well as mounting informal regulatory “dark matter,” one thing starts to stand out: The profusion of various names that even ordinary regulations go by, complicating the goal of controlling them.
The main vehicle for reform is now the bipartisan Regulatory Accountability Act, which would codify some of the regulatory review and cost-benefit analysis procedures employed by presidential administrations since the 1980s, and detailed in their non-controversial executive orders.
“Bipartisan” happens to mean in particular Sen. Heidi Heitkamp, who appeared at a North Dakota tax reform rally with Mr. Trump recently. She’s the lead Democratic co-sponsor (along with Sen. Joe Manchin), and also importantly has worked with Sen. James Lankford, Oklahoma Republican, on agency “guidance document” abuse. Importantly, the new bipartisan Regulatory Accountability Act can either add to the confusion or decrease it, and we need to make a case for the unique opportunity to do the latter before it’s too late.
Lawmakers should inventory, simplify and consolidate the federal bureaucracy’s increasingly confusing nomenclature, which includes rule categories like “major,” “non-major,” “significant,” “economically significant” and numerous others such as “substantive.” That streamlining must also extend beyond formal rules to informal guidance documents, memoranda, administrative interpretations, bulletins and other issuances that agencies use to implement policy. This “dark matter” under many different names and guises proliferates without always following the Administrative Procedure Act’s noticeand-comment rulemaking requirements.
I detail these in my new report “What’s the Difference between ‘Major,’ ‘Significant,’ and All Those Other Federal Rule Categories? A Case for Streamlining Regulatory Impact Classification.”
The notion first occurred to me to dig deeper when I realized the most “bulky” kind of rules, the “economically significant” ones with over $100 million in economic impact, are not actually specifically defined in law or executive order. The name is just a term of art referring to certain type of “significant” rule.
Already bureaucracy, rather than interaction with elected representatives, dominates the relationship of the individual to the government. The number of rules promulgated by executive branch agencies far outstrips the number of laws passed by Congress, which makes getting a handle on the impact of federal regulation daunting.
Over time, the profusion of and array of official designations of rule types and effects has complicated the federal regulatory enterprise. Some types of rules noted above are defined in legislation; some in executive orders; other designations were the creations of administrators.
As the administrative state continues to grow, not knowing what to call regulatory actions nor how to clearly disclose their impact to Americans is a significant but artificially created obstacle to addressing regulatory overreach, one that must be taken into account in any reform legislation. The significant and major rules already get inadequate oversight, let alone the myriad seemingly minor rules.
For example, reporting on agency actions — especially on the costly, burdensome or controversial ones — could be refined by deciding between the terms “significant” or “major” rules to create more uniformity, by greatly expanding disclosure of guidance, and by subjecting guidance to reforms that treat it more like ordinary rulemaking.
The streamlined categories could be given greater clarity by assigning cost estimate tiers to rules — for example, those with estimated annual costs above $50 million and below $100 million, above $100 million and below $150 million, and so forth. Further clarity can come from segregating regulations by categories such as paperwork, economic, social, safety and environmental; and also by separating out those actions addressing agency internal operations that nonetheless get lumped in with other “rules.”
Ultimately, policymakers need to increase democratic accountability for the rules and mandates with which Americans contend by reclaiming its Article I lawmaking power, and ending over-delegation of rulemaking power to the executive branch.
But the Constitution isn’t coming to the rescue in the short term. Therefore, it’s time for bipartisan nomenclaturescrubbing. Today’s complexity helps preserve a large, unwieldy and undemocratic bureaucracy that deadens our economy and society, and reducing that complexity is the lowest of the lowhanging fruit.