Every facet of daily life, including how Americans heat their homes and light their rooms, what food they buy and how they cook it, their children’s toys and the volume on their electronics, is now controlled by government. Legions of bureaucrats who have never set foot on a factory floor now have their hands in every product that comes off a line.
And woe to anyone who dares ply a trade without an occupational license. This includes junk dealers, auctioneers, locksmiths, security guards, athletic trainers, florists, decorators, tow-truck operators and fortune tellers. Regulation has become so pervasive that the fundamental character of the nation resembles servitude to the state more than individual liberty.
Never before has the need to contain regulation been so critical. In just the past seven years, more than 20,000 new regulations have been added to the books, along with more than $108 billion in new annual costs. That requires shifting a tremendous amount of resources from innovation, business expansion and job creation to compliance with government dictates.
The true costs of regulation are actually far greater, in part because costs have not been fully quantified for a significant number of rules.
And regulatory costs are not just a problem for business. They ripple across the economy and soak consumers, causing:
— Higher energy rates from the Environmental Protection Agency’s Clean Power Plan
— Increased food prices for both people and pets as a result of excessively prescriptive food production standards
— Restricted access to credit for consumers and small businesses under Dodd-Frank financial regulations
— Fewer health care choices and higher medical costs because of the Affordable Care Act
— Reduced internet investment and innovation under the net-neutrality rules imposed by the Federal Communications Commission.
Low-income families and fixed-income seniors are hardest hit, of course; higher prices consume a larger proportion of their assets. Ultimately, however, the highest price is the loss of liberty inherent in every government edict.
The Obama administration, more than any of its modern predecessors, has aggressively exploited regulation to accomplish its policy agenda. But excessive regulation cannot be blamed on this White House alone. Much of the red tape imposed during the past five years has been driven by vast and vaguely worded legislation enacted by Congress, including the misnamed Patient Protection and Affordable Care Act (Obamacare) and the Dodd-Frank financial regulation statute, both of which grant broad discretion to multiple agencies.
The next president should seek to rein in the administrative state by proposing a budget that withholds appropriations from unwarranted regulatory initiatives and overzealous agencies.
There is certainly no shortage of targets to start with, such as the net neutrality nonsense perpetrated by the Federal Communications Commission.
Meaningful reform will also require Congress to do its job and hold agencies accountable. For example, no major regulation should be allowed to take effect until Congress explicitly approves it, as is called for under the Regulations from the Executive in Need of Scrutiny Act. Lawmakers should also include requirements for congressional approval of rules in every bill that authorizes regulation.
It is not enough to consider how to reform the rulemaking process. A more substantive debate must address the extent to which it is even appropriate for the federal government (or any level of government) to intervene in policy matters that can be managed by states and, in many instances, by the private sector in a more effective fashion.
The American free enterprise system is the greatest engine of wealth creation in history. Yet the economy has been underperforming for years, and millions of people still are jobless. Taxes are a primary factor, but regulatory excess increasingly inhibits economic growth.
Unless constrained, the administrative state will overwhelm America’s entrepreneurial spirit — and diminish the freedoms upon which this nation was founded.
Diane Katz is the senior research fellow in regulatory policy at the Roe Institute of Economic Policy Studies at The Heritage Foundation.