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Is regulatory reform a hopeless cause?

Kevin R. Kosar

In short, no, although the reader of Charles Murray’s new book might come away with that conclusion. In By the People: Rebuilding Liberty Without Permission (Crown Forum, 2015), Murray paints a dispiriting picture of the modern American state. The U.S. Constitution established a limited federal government within a federal system. The 10th Amendment encapsulates their vision: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.” Until the Progressive Era, the federal government remained small. A large standing army, a bugbear of the Founders, did not exist before the 20th century.

Now, Murray laments, we have a “leviathan” that spends $3.4 trillion per year, and is huge beyond comprehension. Consider: “As of 2013, three undersecretaries reported to the Office of the Secretary of Energy. Combined, those three undersecretaries ran 29 separate offices… In addition, the heads of 15 other offices report directly to the Office of the Secretary. That’s 44 entities.” One senses that Murray’s head nearly exploded when he clicked on one of the bureaus and found it had five divisions and 37 sub-offices.

A particularly confounding and central feature of modern American government is the administrative state. Executive branch agencies issue a few thousand rules per year that have the effect of law. The Code of Federal Regulations, the corpus of standing federal rules, runs nearly 175,000 pages. And this says nothing of the various guidance documents agencies issue to those whom they regulate, and the substantial body of regulatory case law produced by both agencies and the judiciary. One can be forgiven for wondering, as Murray does, if Congress remains our nation’s primary lawmaking body.

The administrative state is, Murray contends, “an extra-legal state within the state,” and his proposed remedy is rebellion. No, Murray is not advocating insurrection or assaults on the government or its employees. He instead proposes “a declaration of limited resistance to the existing government.” The administrative state, he argues, is a bit like the Wizard of Oz—frightening but, in fact, feeble. For all the rules and regulations promulgated, agencies have very limited resources to enforce them. So, we should simply disobey. If “the man” comes down on you, then the “Madison Fund,” a private legal defense fund he proposes, will defend you.

Murray’s dour assessment and impish proposal is predicated on the hopelessness of reform. Congress “is systemically corrupt” and will never roll back the administrative state in any significant way. For sure, Congress has been complicit in the growth of the administrative state. It established and funds agencies, and has delegated much authority to them. Additionally, Congress’s previous efforts at regulatory reform, as Stuart Shapiro and Deanna Moran of the Mercatus Center point out, have not lived up to expectations. The Paperwork Reduction Act, the Regulatory Flexibility Act, the Unfunded Mandates Reform Act, the Small Business Regulatory Enforcement Fairness Act and the Congressional Review Act all have nibbled at the margins of the administrative state. The fundamental machinery of the regulatory process, as established by the Administrative Procedure Act, chugs on.

But the argument that Congress can never do much to reform the regulatory state is unpersuasive. It can. The central political challenge is to make regulatory reform a more bipartisan issue. Democratic advocates for regulatory reform tend to be few. Regulatory reform tends to be treated as a business – and therefore, Republican – issue.

This is unfortunate, because regulations affect nearly every aspect of modern life. They are neither inherently left nor inherently right. A perusal of the Competitive Enterprise Institute’s survey, “The 10,000 Commandments,” highlights the diversity of subjects for new regulations: the military’s Tricare prescription drug program; catfish inspections; federal assistance to foreign atomic energy activities; and disaster assistance programs, to cite just a few.

“Public-school teachers,” Murray observes, “typically labor under regulatory regimes that prescribe not only the curriculum but minutely spell out how that curriculum must be taught—an infantilization of teachers that drives many of the best ones from the public schools.”

There are approaches to regulatory reform that are innately bipartisan: they would strengthen the legislative branch as an institution vis-a-vis the executive. Congress could establish a Congressional Regulatory Office. Modeled on the nonpartisan Congressional Budget Office and Congressional Research Service, the new CRO would advise Congress on proposed and forthcoming regulations, and regulatory policy generally. A Congress with more expertise in regulations might well be less apt to give away its law-making authority and more able to thwart bad regulations before they are issued.

As for the great mass of existing regulations that Murray (and others, including myself) find problematic, there is a bipartisan, institutional solution. Congress can create a commission to study the corpus of federal regulations and identify rules for abolition. Anachronistic or unwise regulations would be rolled into a bill, and Congress would vote up or down on them (a bit like BRAC). Assuming this commission operates collegially and avoids highly charged regulations (e.g., Obamacare), it could significantly reduce the stock of regulations in a sensible fashion. Sen. Angus King, I-Maine, has proposed doing this in the Regulatory Improvement Act (S. 708), which has both Republican and Democratic original co-sponsors. Think tanks on the left and right both have advocated such a commission. Rep. Jason Smith (R-MO), has introduced the SCRUB Act (H.R. 1155) in the House, which proposes a similar commission.

Regulatory reform is not easy, but it is also not impossible. Committees in both chambers of Congress are working on it. Republicans in the House would be happy to move a regulation reform bill. All that is needed is a few more Democrats in the Senate to join the effort, and major reform can be achieved.

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