Evaluating the free market by comparing it to the alternatives (We don't need more regulations, We don't need more price controls, No Socialism in the courtroom, Hey, White House, leave us all alone)
Thursday, October 31, 2024
The compliance crisis: Unveiling the regulatory loopholes agencies love
"While federal regulatory reform is critical, it’s equally important
that existing oversight laws be followed. Unfortunately, many of these
laws are routinely disregarded, with little consequence.
We at CEI often point to the fact that no one really knows how many
federal agencies exist. A new report from the Government Accountability
Office (GAO) emphasizes a related problem: we also don’t know how many
federal spending programs exist either, despite a 2011 law requiring a
comprehensive inventory from the Office of Management and Budget (OMB).
Recent national defense authorization legislation, GAO notes, has given
OMB until January 2025 to comply.
We also often point
to a growing fusion between spending and regulation, so this lapse by
OMB is troublesome to say the least. Unfortunately, skepticism is
warranted with respect to the thoroughness of OMB’s upcoming inventory.
OMB’s track record on compliance with regulatory oversight laws is also
poor, as I detail in a new column at Forbes, and Congress has been largely indifferent to holding them accountable. Consider the following:
The Regulatory Right-to-Know Act mandates an annual
report to Congress on the benefits and costs of major rules. However,
these reports are consistently overdue and incomplete. The most recent,
covering fiscal years 2020-22, was published in early 2024. Most
glaringly, the requirement for an aggregate cost estimate for
federal regulations have been ignored since the early 2000s, leaving
little transparency about the cumulative burden of the administrative
state.
The Paperwork Reduction Act also suffers from neglect. The Information Collection Budget
(ICB) required by the Act has been sporadically published in recent
years, with several delayed editions appearing in 2023. The latest ICB shifts focus away
from reducing paperwork burdens toward increasing access to government
benefits (of the very sort OMB neglects to thoroughly inventory,
conveniently enough)—neglecting its original purpose. Additionally, the
annual “Paperwork Burden Accounting” roundup, which traditionally
documented over 10 billion hours of paperwork, is conspicuously absent
from the latest edition. We did inquire, but it remains unaddressed:
The Regulatory Flexibility Act (RFA), intended to ease small business burdens, is also often ignored. A 2024 report
from the House Small Business Committee found that agencies frequently
misclassify rules to bypass RFA analysis and underestimate the impact on
small businesses. They also fail to assess whether new rules duplicate
existing regulations, resulting in unnecessary burdens.
The Congressional Review Act, designed to give
Congress a window to review and disapprove major rules, is also
underutilized. Despite thousands of rules being issued since its
passage, fewer than two dozen have been overturned. But elements of it
are also unlawfully disregarded. Some major rules are not properly
submitted to GAO and to both houses of Congress, which raises questions about their validity.
There are a couple recent laws that could improve matters that I discuss in the Forbes article, such a 2023 law that Biden signed requiring 100-word summaries to accompany rules in the Federal Register,
and one just signed this month (the GAO Database Modernization Act, to
supplement GAO’s database by requiring agencies to notify GAO whenever a
rule is revoked, suspended, replaced, amended, or otherwise made
ineffective.
These two developments represent a silver lining on a dark regulatory
cloud. Congress needs to remain vigilant that they do not lapse in the
manner of their predecessors. Addressing widespread noncompliance with
regulatory oversight laws should be a priority in the coming months and
years as the 118th Congress enters its final weeks.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.