FTC Leads Way on Regulatory Reforms

For taxpayers it is rare indeed for history to repeat itself in a positive way. That’s what makes recent moves toward smart regulatory relief under Federal Trade Commission (FTC) Acting Chair Maureen Ohlhausen all the more praiseworthy. Not one to allow bureaucratic inertia to overcome reforms of an ailing managerial culture, Ohlhausen has given real meaning to the term “draining the swamp” -- and, in the process has given inspiration to leaders at other agencies.

In a robust but thoughtful response to a Presidential Directive aimed at rooting out extraneous regulations and bureaucratic procedures, Acting Chair Ohlhausen has already taken half a dozen major steps toward this end, among them: clearing the enforcement bureaus’ dockets of older investigations, streamlining information demands on private-sector parties, and introducing economic expertise earlier in the investigative process. In a statement Ohlhausen provided a perspective that any Executive Branch leader ought to be able to emulate: “We are focusing our resources where they will do the most good for the public and eliminating wasteful, legacy regulations and processes that have outlived their usefulness. American taxpayers deserve and expect nothing less from us.”

One of the top challenges for virtually any regulatory agency is to ensure policy is grounded in sound economic analysis. And that’s why this post began with a reference to history repeating itself. More than 35 years ago, at one of FTC’s lowest points, incoming Chairman Jim Miller put a new emphasis on cost-benefit calculations for agency actions going forward. The result was a much more sound and nimble regulatory approach that both protected consumers from bad practices and gave them the benefits of innovative products and services. Sometimes that legacy has translated directly into more modern cases, as with this year’s intelligent rulemaking on contact lens purchases.

Unfortunately, as a 2015 NTU Policy Paper on FTC pointed out, this lesson is easily forgotten and must be continually re-learned. In recent years the agency has been increasingly plagued by mission creep, accusations of arbitrary policy, heavy-handed enforcement tactics, and a resistance to public accountability. These problems have implications for taxpayers well beyond FTC’s budget, as the Policy Paper notes:

It is clear that hi-tech innovation can change the quality and cost of government for the better, if federal managers properly embrace it. Yet, they may have fewer opportunities to do so, if the pipeline of private- sector development is slowed or cut off because meddling FTC investigations force them to divert resources away from laboratories and into courtrooms instead.

Ohlhausen’s leadership on FTC issues could likewise help to build momentum for additional reforms proposed in Congress. In a statement this week,  Representative Bob Latta (R-OH), who chairs the House Digital Commerce and Consumer Protection Subcommittee, provided a timely reminder that in the previous Congress the Subcommittee recommended a legislative package that were in synch with several of Ohlhausen’s current changes of direction. Of particular ongoing interest to NTU is the “Revealing Economic Conclusions for Suggestions (RECs) Act, which would have more clearly codified cost-benefit analysis in FTC decision-making.

In this Congress NTU will be ramping up its activities on behalf of a new RECs bill and other improvements to FTC. Partnering with Acting Chair Ohlhausen and concerned lawmakers on both sides of the aisle, the opportunities for taxpayers to make new history are brighter than they have been for quite some time.