In his recent State of the Union address, President Barack Obama appeared to get his biggest bipartisan applause for this line: “I think there are outdated regulations that need to be changed. There is red tape that needs to be cut.”
With the current focus on economic growth and national competitiveness, there’s both a need and an opportunity for bipartisan agreement here — if not this year, at least in 2017.
Here are five proposals on which Democrats and Republicans should be able to agree:
1. Require every regulatory agency, by statute, to produce an annual report on its progress in cutting regulatory costs.
In 2011, Obama ordered his agencies to engage in a “regulatory look-back,” with the goal of reducing and simplifying national burdens. That effort has produced significant results, with over $22 billion in short-term savings. But far more remains to be done.
Congress should require every agency to act, every year, to cut unnecessary regulatory requirements and paperwork burdens.
2. Enact into law the cost-benefit requirements that have been imposed by all presidents since Ronald Reagan.
In 1981, Reagan issued a historic executive order, forbidding executive agencies from issuing new regulations unless their benefits outweigh their costs, and also requiring agencies to choose the least expensive means for achieving their goals. Reaffirmed by every president since Reagan, these requirements have done a lot of good.
Nonetheless, agencies don’t always obey them, and sometimes they aren’t transparent enough about the costs and benefits of new rules. A congressional enactment would have more weight than an executive order.
3. Extend cost-benefit discipline to independent regulatory agencies.
Reagan declined to apply his 1981 executive order to agencies designated by Congress as having some degree of insulation from presidential control, such as the Securities and Exchange Commission, the Federal Reserve Board, and the Federal Communications Commission.
In view of the substantial costs now imposed by such agencies on the private sector, Congress itself should require more discipline from them.
4. Control the use of “interim final rules.”
Under the Administrative Procedure Act, agencies are usually required to propose their rules to the public, and to seek comments before rules can be finalized.
In the last two decades, however, agencies have increasingly resorted to regulations with a confusing name: Interim final rules. Congress or the president should constrain this practice, by authorizing interim final rules only when necessary and requiring agencies to revisit them.
5. Require “employment impact statements.”
Republican presidential candidate Marco Rubio has called the Environmental Protection Agency the “Employment Prevention Agency.” That’s hyperbole, but it’s fair to ask agencies to estimate the employment effects of rules that are especially expensive.
Under the Obama administration, agencies have often done exactly that. But Congress has not required them to do so. Nor has any president, Republican or Democratic, explicitly mandated such an assessment. If a regulation really would eliminate significant numbers of jobs, the American public should know about it.
Cass Sunstein, a Bloomberg View columnist, is director of the Harvard Law School’s program on behavioral economics and public policy.
