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With pressing public policy debates over topics like healthcare, taxes, and infrastructure at the top of Americans’ minds, it is easy to forget that the U.S. regulatory system hasn’t undergone a significant update since 1996 . This is a problem because outdated, costly, and ineffective regulations place a substantial drag on the economy and trap Americans in ever-growing piles of red tape.
To change this, Rep. Mark Meadows (R-NC) introduced HR 2623, the Lessening Regulatory Costs and Establishing a Federal Regulatory Budget Act of 2017. This bill would require executive agencies to repeal two existing regulations for each new economically significant regulation that is issued. The bill would also make sure that the estimated costs of most new regulation are at least equaled by the ones that are eliminated.
In the following interview, Rep. Meadows explains how Congress can encourage economic growth, enhance public oversight, and help small business owners by making regulatory reform one of its top priorities in 2018 .
Jared Meyer: Your push for codifying a one in, two out regulatory reform sounds a lot like one of President Trump’s first executive orders. Why does Congress need to act when the executive branch has made cutting regulations a top priority?
Rep. Mark Meadows: We should applaud President Trump for his decision to prioritize regulatory reform. One of the biggest promises he made to voters during his campaign was that he would get to work bringing the regulatory state under control. Starting in his first month in office, he’s kept his promise.
At the same time, the reality is that governing by executive actions is easy to reverse when a new administration takes over the White House. Many of President Trump’s early directives have been reversing unconstitutional, overreaching, or damaging executive orders from President Obama. What we’re finding out through these first nine months is that if you govern with just the stroke of the pen—as President Obama famously said and did—it’s just as easy to undo those actions with a different stroke from the same pen.
President Trump understands this, and that’s why he’s insisting that Congress take action on issues like Obamacare, tax reform, etc. If we legislate these changes, like what we’re pushing for with our two-for-one bill, then our accomplishments can last beyond the Trump administration.
JM: How do you respond to people who argue that America’s regulatory system is working just fine?
MM: I can tell you that if people are saying that, none of them live in my district. The costs that the regulatory state puts on families, small business, and the economy as a whole are astronomical. Putting aside the high cost to the economy (some estimates place it at over $2 trillion every year), compliance expenditures place a significant burden on American companies—particularly manufacturers. For example, the National Association of Manufacturers conducted a 2012 study which concluded that the average U.S. company pays $9,991 per employee per year just to comply with federal regulations. Manufacturers pay around double that at an average of $19,564 per employee. Those are mind-boggling figures.
These costs are one reason why regulatory reform is needed so badly. To put the magnitude of this problem in context, consider the numerical impact President Trump’s executive order is already having. Even though agencies are still regularly issuing new regulations, the President’s effort to reduce the Code of Federal Regulations has saved $22 million as of August—far surpassing the goal of a net regulatory cost of $0. Agencies have responded to the administration’s clear message and been aggressive in their approach. Many of them have begun comprehensive reviews not only of their regulations, but of their guidance documents, policies, and information collections to understand what specific regulations in our system are unnecessarily burdensome to job creators and workers.
The President’s performance in this area has been exactly what voters asked of him. Now, it’s critical that Congress follow his lead and not let this opportunity go to waste. We have to make sure that these regulatory reforms can last beyond the Trump administration .
JM: Besides two-for-one, are there any other regulatory reforms that you think are necessary?
MM: Beyond codifying the President’s directive, what this is really about is changing the culture of Washington, D.C. and how our government approaches regulating. Those wondering why such a change in culture is needed should look no further than one of the main campaign slogans the President used throughout 2016—“Drain the Swamp.” When Americans refer to this phrase, they are worried that D.C. politicians and lobbyists don’t have the public’s best interests in mind when making decisions on how to impose and enforce regulations.
Besides our one-in, two-out bill, a badly needed regulatory reform bill is the Regulations from the Executive in Need of Scrutiny Act (REINS Act), a bill that I’ve co-sponsored in the past. I must applaud Senator Mike Lee as he’s discussed the issue extensively since he was elected.
One of the major flaws of our regulatory process is that Congress has delegated rulemaking to agencies like the EPA that aren’t directly accountable to voters . Agencies then take this authority and run with it, often crafting new regulations or interpretations that have little to no basis in law. This system allows Congress to ‘pass the buck’ and avoid accountability from unpopular regulations that voters oppose. The REINS Act would address much of this problem by requiring Congress to approve any new rule with a major impact on the economy, or annual costs over $100 million. That’s what Congress should have been doing all along.
Ultimately, the culture of our government must return its focus to where it rightfully belongs—on the best interests of the American people. I think that if anyone looked at our 180,000-page Code of Federal Regulations, they’d find that much of what our government involves itself with does not serve their interests. That’s what we’re trying to fix, and I believe that we will succeed.
JM: Excessive regulation holds back the United States’ economic potential. President Trump and many members of Congress understand that dramatic reforms to the regulatory state are needed to promote economic opportunity and increase economic growth. Thankfully, many legislative options can create lasting, positive changes to the federal regulatory process. The Lessening Regulatory Costs and Establishing a Federal Regulatory Budget Act of 2017 is clearly one of these reforms.
