NCPA - National Center for Policy Analysis

Red Tape under Obama

April 3, 2014

The United States is in desperate need of regulatory reform, say James Gattuso and Diane Katz, research fellows in regulatory policy at the Heritage Foundation.

  • Over the last five years, the Obama administration has issued 157 new major rules at an annual cost of $73 billion.
  • That number includes 26 new major rules in 2013 alone, twice the annual average of George W. Bush.
  • And already, regulators have identified 125 more major rules that they plan to work on in 2014.

What happened on the regulatory front in 2013?

  • Dodd-Frank rules accounted for 13 of the 26 new major rules last year.
  • The most expensive rule in 2013 was related to ObamaCare. It requires individual and group insurers to provide "parity" in benefits between mental health or substance abuse services and medical or surgical benefits.
  • The reported cost of last year's regulations is understated. Last year, costs were not even quantified for seven of the 26 major regulations, and nine of them lacked key cost data.

More rules are on the horizon. Of 2,305 proposed and final rules planned by agencies, 125 are listed as "economically significant." Gattuso and Katz identify a number of necessary reforms that Congress needs to take:

  • Congressional approval of major regulations: Congress should have to vote to approve a major regulation before it can take effect.
  • Analyze regulatory consequences of proposed legislation prior to a vote: Lawmakers do not assess the costs imposed by bills that authorize regulatory restrictions. These assessments should be required before any piece of legislation reaches the floor for a vote.
  • Sunset deadlines for all major regulations: If regulations are not explicitly reaffirmed by the relevant agency, they should automatically expire. Old regulations are left on the books today, even when they are not useful.
  • Review of independent agencies' regulations in the White House regulatory review process: Independent agencies such as the Securities and Exchange Commission conduct rulemaking without Office of Information and Regulatory Affairs review. These agencies can issue rules without performing a cost-benefit analysis. These "independent" agencies should be subject to the same rules as executive branch agencies.

Source: James L. Gattuso and Diane Katz, "Red Tape Rising: Five Years of Regulatory Expansion," Heritage Foundation, March 26, 2014.


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