Monday, February 20, 2017

Balancing the Regulatory Budget: Another Analogy for Consideration

Two weeks ago, I posted on the POTUS's "one in, two out" executive order on executive branch agency regulations.  In that post, I used critiques of a clothing maintenance/closet cleaning system working off the same principle.  Interestingly, a CATO report was released January 31, unbeknownst to me at the time I wrote and published my post, that makes some of the same points.  Since that time, I have wondered whether there is a more wise, effective  way to simply address bloated federal agency regulations.  Here is an idea that currently holds my interest.

In a leadership training program a few years ago, I remember hearing about a technique used in institutional budgeting processes.  A unit leader who is required to submit a proposed budget to a superior or to a central budgeting office is asked to submit with the budget a proposal on what the unit would cut if the budget was cut by 5% (or another desired number) and what the unit would spend on if its budget was increased by 5% (or another desired number).  It struck me that a similar system could be employed to true up federal agency regulations.

Specifically, each agency could be required to establish reasonable, evidence-based objectives for its operations for the forthcoming fiscal year, consistent with the agency's overall mandate. Then, the agency could be compelled to report to the President (or a designee) on the ways in which the agency's current body of regulations succeeds or fails to achieve those objectives and that mandate. Finally, as part of its budget submission, the agency could be asked to (1) suggest which regulations it would eliminate if it had to cut a specific percentage of its existing body of regulations and (2) identify and recommend new regulations for adoption if it had the opportunity to introduce new regulation, in each case with the goal of better achieving the agency's objectives and mandate.

Could a system like this work in curing over-regulation?  Is it too simplistic?  Leave your responses and comments below.

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The basic problem is that a regulation is not a quantifiable unit. Cutting "5%" of regulations is a meaningless statement.

Posted by: ohwilleke | Feb 23, 2017 6:53:20 AM

Right, ohwilleke. That is the problem with any simplistic scheme that I could think of as an alternative. Bean counting rule numbers or discrete sets of rules or Federal Register pages numbers seems like a silly proposition. Metrics for measuring a reduction in regulation are definitely tricky. Unfortunately, public discussion centers around things like how long the tax code is or the number of rules with which a business must comply in a particular regulated industry. As a result, public debate about reducing regulation has focused on the same--as a heuristic of sorts.

Do you know of any broadly applicable metrics for measuring the weight of regulation that could be simply stated and engaged? Everything I can come up with that makes more sense is very fact-specific--based on individual regulatory frameworks. And while I think that's the most prudent way to proceed, I am not sure it has or will soon have much traction . . . . This was an early attempt to scope out generally stated principles that would still allow for customization based on individual bodies of regulation.

Posted by: joanheminway | Feb 23, 2017 7:18:08 AM

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