Regulations in the US have tightened significantly in almost every area over the last century. In 1950, the US Code of Federal Regulations was less than 10,000 pages. Today that number stands at 186,000. Federal regulators spent about $5 billion in today’s terms in 1960, compared to about $81 billion in 2019. The number of federal regulator employees is now approaching 300,000.
Given these facts, the growth of federal regulation seems unstoppable. But several states are showing unexpected signs of progress in their fight against bureaucracy, and this could bode well for federal reforms.
On March 10, Ohio Gov. Mike DeWine signed Senate Bill 9, which requires state agencies to reduce their regulatory restrictions by 30% over three years. The reform builds on a 2019 law and relies on foreign ministries having to make detailed inventories of the restrictions they are imposing. Senate Bill 9 cuts, once achieved, will cap the overall volume of future regulations.
With an estimated 263,000 government restrictions in place — the fourth-highest number in the US — it’s not surprising that Ohio state lawmakers are trying to make their rulemaking process sane again. Time will tell how successful the reforms will be, but if Senate Bill 9 works, it could be a dress rehearsal for much larger federal reforms that are more cosmic in scope.
When Gina Raimondo became Governor of Rhode Island in 2015, she set a goal to reduce regulation in her state by 15%. Ultimately, Rhode Island eliminated 33% of its bureaucracy, with a total of 77% of the code being revised or reformed. In 2019, Idaho retired all of its regulatory code and replaced it with a new version, and Governor Brad Little claimed to have trimmed or simplified 95% of the rules.
In both Idaho and Rhode Island, the standard for regulations shifted toward elimination. Regulators had to justify compliance with a rule. This is both revolutionary and necessary when thousands of outdated or duplicate regulations fill the rule books in every state and no one has time to review each one. The pragmatic use of sunset provisions (rule expiration dates), regulatory caps and reduction targets can be a powerful tool to not only halt but reverse regulatory growth.
Can such reforms work at the federal level, where there is far more regulation than any state? Partiality can be the biggest hurdle. In politically homogeneous states it is relatively easy to reach a consensus. Unification is much more difficult for the nation as a whole. But it is a good sign that three very different countries are all supporting pro-business and pro-growth policies. The “laboratories of democracy” live up to their reputation.
The Biden administration has a lot of work to do, but tackling over-regulation isn’t necessarily at odds with its goals — regulations often stand in the way of renewable energy and affordable housing development. The Obama administration encouraged regular regulatory reviews and made professional licensing reform a priority.
At the very least, a future government concerned with economic growth can learn lessons from these government efforts and keep up with them. The time has come for regulatory change, and states have created a roadmap on how to achieve this.
Mr. Broughel is a Senior Research Fellow at the Mercatus Center at George Mason University and the author of research and testimony that influenced Ohio reform.
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https://www.wsj.com/articles/cutting-red-tape-could-advance-bidens-agenda-ohio-rhode-island-rule-making-11648763657 The reduction in bureaucracy could advance Biden’s agenda