For the third Congress running, the House passed the REINS Act (Regulations from the Executive in Need of Scrutiny) with bipartisan support, 243-165. NTU has been a long-time supporter of the legislation and issued a key-vote alert ahead of today’s floor consideration. As we explained at the time, the REINS Act would “increase legislative control and accountability over federal regulatory policy by requiring Congress to affirmatively approve any rule that may result in an annual effect on the economy of $100 million or more.”
First introduced by then-Representative Geoff Davis (R-KY) in 2009, the REINS Act was inspired by a constituent who saw his water bills double due to a costly Environmental Protection Agency consent-decree and brought the matter to his lawmaker’s attention as Phil Kerpen explains over at Townhall.com.
Unfortunately, matters haven’t improved since 2009. Despite espousing in 2011 in the The Wall Street Journal that regulations “have gotten out of balance, placing unreasonable burdens on business – burdens that have stifled innovation and have had a chilling effect on growth and jobs,” President Obama has maintained an astonishing rate of regulation that far eclipses his predecessors. According to the American Action Forum, President Obama averaged 81 major rules (those with an annual effect of $100 million or more on the economy) a year from 2009 to 2014. This includes issuing 100 major rules in 2010 – a feat no administration has yet achieved since the enactment of the Congressional Review Act in 1996.
These regulations come at a serious price to businesses, individuals, and the economy. The Competitive Enterprise Institute publishes an “annual snapshot of the federal regulatory state” entitled, “Ten Thousand Commandments.” This year’s edition paints a stark picture of the hidden cost regulations impose:
- Federal regulation compliance and intervention costs $1.88 trillion/year or 11 percent of GDP.
- 16 rules were issued for every law enacted by Congress in 2014.
- The total cost of federal regulation imposes a major burden on U.S. households totaling $14,976/year.
- If it were a stand-alone economy, U.S. regulation would be the world’s 10th largest, just behind Russia.
In essence, regulations impose a hidden tax on the economy, resulting in real costs that are passed onto consumers and limit choice. These fall particularly heavily on the poor, who would benefit most from regulatory reform, as Patrick McLaughlin of the Mercatus Center illustrates:
When regulations cause the prices of goods and services to increase, lower-income households have to make a choice: no longer buy those goods, substitute them with something else if possible, or buy less of the more expensive good. This can have the unintended consequence of causing lower-income families not to be able to purchase some good or service that is a medical necessity or that would have reduced the risk of accidental death or injury. …
The cumulative cost of regulations amounts to a hidden, regressive burden. But it’s a burden that could be lightened. In fact, one way of viewing that burden is as an opportunity: retrospective analysis that eliminates a portion of the regulatory cost burden would act as a progressive tax refund.
It should be troubling to taxpayers that the policies promulgated by unelected officials can impose such an outsized burden on our prosperity and day to day life. Over time, Congress has only too gladly permitted the shift of its legislative and oversight responsibilities to an increasingly powerful executive and cumbersome bureaucracy. When considering costly regulatory changes, that authority rightly sits with elected officials who answer to those footing the bill.
Already, many states have comparable regulatory review processes. It makes sense for taxpayers to have the same accountability at the federal level. The REINS Act is an important first step in restoring much needed oversight to the regulatory state, and one that would begin paying off for taxpayers right away. The American Action Forum estimates that adoption of the REINS Act could “save more than $27 billion in annual regulatory cost and 11.5 million paperwork burden hours.” Those are major savings that our economy urgently needs and hours that taxpayers could put to much better use.
The Senate has a big opportunity to score points for taxpayers if they take up the REINS Act – and they need to act fast before the regulatory burden becomes too much to bear.
Contact your Senator and urge them to support the REINS Act!