Against the backdrop of the Administration’s ambitious deregulatory agenda, an expert panel at the Brookings Institute met Friday to discuss the regulatory landscape, the concept of a regulatory budgets and ideas for reform in a paper produced by Ted Gayer and Phillip Wallach of Brookings and Robert Litan of the Council on Foreign Relations.
Many on the panel echoed the observations of Michael Mandel and Diana Carew of the Progressive Policy Institute, “Like pebbles tossed in a stream, each regulation may do little economic harm. But these pebbles eventually build up until they’re a dam blocking economic growth and innovation.”
Many observers have pointed to this accumulation of pebbles as blockage that impedes the currents of innovation and costs small businesses $11,724 per employee per year.
Moderated by Cheryl Bolen of Bloomberg, the discussion, at the Brookings’ Center on Regulation and Markets, involved economists and regulatory experts from Brookings, George Washington University, Rutgers University, and Georgetown.
The paper concluded that the Trump administration’s regulatory push could “harness energy toward modernizing and streamlining regulation in a virtuous cycle involving both bureaucrats and regulated firms.”
“This is designed to get agencies to use some of their energy to tackle accumulated regulations that have built up over many decades of an active regulatory state. That’s not something that’s not so off the wall,” Wallach said.
The panel overwhelmingly accepted the need for America to address years of regulatory accretion while retaining regulations that are truly in the public interest. It examined the cases of British Columbia and the United Kingdom, who instituted regulatory budget caps and “two-for-one” type requirements for trimming regulations before adding new ones and keeping overall costs low—both key elements of Trump’s new plan.
The paper found that British Columbia presented an extremely promising example with a 49 percent reduction in regulatory requirements since 2001, which led to a similar program being implemented nationwide.
“There’s real ambition behind [Trump’s] plan and it would be a real disappointment if all it amounted to was a very complicated moratorium. The business community thinks regulatory accumulation is a really serious problem,” Wallach said.
Susan Dudley, formerly administrator of the Office of Information and Regulatory Affairs (OIRA) in the U.S. Office of Management and Budget, took a strong stance in favor of reform, echoing many of the CRI’s concerns regarding regulatory accretion as well as accountability and transparency in the rulemaking process.
As Dudley noted, “There will always be entrenched interests that make it hard to remove regulations once they’re on the book… I think if we look at the evidence from other countries, there is low hanging fruit and ways to modify regulations to make them easier to comply with and less redundant.”
Here at the Coalition for Regulatory Innovation, we couldn’t agree more.