The need for regulatory reform and relief has been recognized both in Sacramento and Washington, D.C. — and now there are some proposals to do something about it.
California’s dreadful business climate is no secret. It has ranked dead last in Chief Executive magazine’s annual “Best and Worst States for Business” survey of CEOs all 12 years the survey has been conducted, and again came in 50th in the “Taxation and Regulation” category last year.
But regulatory issues are not confined to California. Federal regulatory compliance costs totaled about $1.9 trillion in 2015 — nearly $15,000 per household each year — according to the Competitive Enterprise Institute’s most recent “Ten Thousand Commandments” report.
To address the problem, newly elected Assemblyman Vince Fong, R-Bakersfield, has introduced Assembly Bill 77, which would require the Legislature to approve proposed regulations estimated to cost $50 million or more. This would provide some measure of a check on regulatory agencies’ power, though the effect will be muted, at least in the short term, given the current Democratic supermajority, which seems never to have met an expansion of government power that it did not like.
“The cost of food energy, transportation and doing business continues to grow year after year because of the high-cost regulations that fall upon residents and businesses every day,” Fong said in a statement. “AB77 is a common-sense measure that will bring greater transparency and accountability to a regulatory system that too often overlooks the harmful and costly economic impacts that put at risk the livelihood of Californians throughout the state.”
At the national level, the House of Representatives already passed several regulatory reform measures last month, including the Regulations from the Executive in Need of Scrutiny Act of 2017, or the REINS Act. In similar fashion to the Fong bill in California, it would require both houses of Congress to approve regulations estimated to impose $100 million or more in costs before the regulations could go into effect.
The House also approved the Midnight Rules Relief Act, introduced by Rep. Darrell Issa, R-Vista, which would allow Congress in a single vote to overturn numerous regulations — and potentially all of them — issued during the last seven months or so of Barack Obama’s presidency, and the Regulatory Accountability Act, which would require greater information and transparency of proposed rules, force agencies to choose the lowest-cost rulemaking alternative, allow courts to decide regulatory matters without deferring to the agency’s interpretation of the rules and postpone regulations estimated to cost $1 billion or more until legal challenges filed within a certain period have been resolved.
Not to be outdone, on Monday President Donald Trump signed an executive order that emulates a reform adopted by the U.K. which generally requires agencies seeking to impose a new rule to repeal two or more existing regulations costing at least as much.
Given the growth in regulatory power and costs, which deprive people of their freedom and livelihoods and depress economic growth, such measures would be a welcome relief, and we hope to see more of them, like Assemblyman Fong’s bill, adopted in California as well.
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