Primary benefit of Fed red tape is the self esteem of unelected bureaucrats

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Stephen Moore

By Stephen Moore

Last summer, at the first meeting of the Trump Leadership Council — an advisory group consisting of top CEOs from major companies — Donald Trump asked business leaders what their biggest problems were.

I expected the answer to be America’s anti-growth tax system. Almost all the CEOs did list the federal tax code as an albatross, but not the heaviest one.

Instead, I was surprised to learn, most found the biggest restraint on growth to be federal red tape and regulation. Across all industries — manufacturers, energy firms, financial services, agriculture interests — federal rules were seen as mindless, inefficient, costly and incomprehensible.

Trump is off to a speedy start in rolling back the rule-making industry in Washington. He has signed an executive order that mandates that any agency wanting to implement a new business regulation must at the same time repeal two existing regulations. This should reverse the tide of regulatory burdens. Yet there’s so much more to be done. And Congress, not just the president, will have to play a lead role.

Time out for a civics lesson: One of the mysteries of American government over the last half-century is why Congress has acceded so much lawmaking authority to what is now the fourth branch of government: federal agencies and interest groups. These agencies — the Securities and Exchange Commission, Federal Trade Commission, Food and Drug Administration and dozens more — have become fiefdoms that reign over private industries. They are effectively accountable to no one — and certainly not to Congress.

But of course, Congress is supposed to make the laws — not unelected bureaucrats at the Environmental Protection Agency or the Commodity Futures Trading Commission. In the last decade or so, most of the big laws that affect private industry and consumers have been enacted by non-lawmakers.

The excuse from Congress is that there are so many rules and regulations that the House and Senate can’t possibly approve every one of them. Well, it’s true that there are tens of thousand of these edicts. But isn’t that the crux of the problem?

A bigger problem is that agencies have become arrogant with power and desensitized to the impact of their litany of “thou shalls” and “thou shall nots.” Martha Kent of the Occupational Safety and Health Administration once put the attitude of these bureaucrats succinctly: “As long as I’m regulating, I’m happy.” She said she “absolutely loves” putting out “a reg” and that she was “born to regulate.” This sounds like someone who is clueless about private industry.

But who will stop these bureaucrats who are drunk with power?

A new analysis by my colleague Jason Pye at FreedomWorks finds that under Barack Obama there were well over 500 new regulations with costs to the economy of more than $100 million each.

That means these imposed a minimum of $50 billion of cost to the economy. How many of these were overturned by a mostly Republican Congress? Except for the roll back of some midnight regulations passed by Obama, the answer is exactly zero.

The solution is a law that requires congressional approval before a regulation takes place. If I had my way, each and every new rule would only take effect after a vote of approval by the House and Senate. If they have to stay up until midnight to do it, so be it. That’s what we pay these people for. At the very least, the Regulations in Need of Scrutiny Act (or the “REINS Act”) would require congressional approval of any rule with a cost of $100 million to workers, employers or consumers.

The CEOs on the Trump Leadership Council who called regulation the greatest threat to American prosperity weren’t making this stuff up. A 2010 study by the Small Business Administration estimated regulations cost small businesses $1.75 trillion a year. That’s more than the entire annual output of Pennsylvania and Ohio combined.

This is a gigantic tax on the American economy — almost like a second income tax — sapping us of strength. The regulators enjoy doing it, and it will continue unabated unless Congress stops complaining about regulation and actually does something about it.

Stephen Moore is a columnist for, an economic consultant with Freedom Works and a senior economic adviser to the Donald Trump campaign.

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