Ban­ish­ing reg­u­la­tory ‘dark mat­ter’

Cut­ting through the con­fus­ing nomen­cla­ture helps to shrink the bu­reau­cracy

The Washington Times Weekly - - Front Page - By Clyde Wayne Crews Jr. Wayne Crews is vice pres­i­dent for pol­icy and di­rec­tor of tech­nol­ogy stud­ies at the Com­pet­i­tive En­ter­prise In­sti­tute.

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.


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