The (Ouch!) Pain of Overregulation

Article excerpt

Much debate during the recent campaign season was focused on the role of government. With a new slate of legislators about to take office, now is a good time to think about the size and power of our federal bureaucracy and the detrimental effect of its intrusive regulations on the American economy and people.

The cost of our regulatory system is enormous. To comply with federal regulations alone costs between $300 billion and $500 billion a year, or $4,000 to $6,000 for every working man and woman in the country. We spend 6.6 billion hours complying with federal paperwork requirements.

Over the past year, the nonprofit National Policy Forum has undertaken the most inclusive, participatory policy-development process in the nation's history. At more than 60 public forums in communities across the country, and through a variety of other outreach efforts, more than 177,000 concerned Americans expressed their ideas about the critical challenges facing the country.

These are the beliefs of individual citizens, not special interests. The strongest opinions were voiced in opposition to the big-government, high-tax and regulatory agenda currently being pursued in Washington and the hundreds of thousands of pages of new laws and regulations enacted every year by Congress and the federal government. Ultimately, people realize that overregulation remains a colossal obstacle to greater economic growth and individual liberty.

Perhaps the worst legacy of overregulation is that it reduces the legitimacy of government in the eyes of the public. People view big government as an adversary, rather than a supporter, of economic growth. Americans believe that big government penalizes ingenuity. Remember when Ronald Reagan said, "Today, if you invent a better mousetrap, the government comes along with a better mouse"? People are still very much concerned that big government is stamping out the entrepreneurial spirit.

Overregulation hurts small- and medium-sized businesses disproportionately because they have fewer resources to allocate for compliance. This, in turn, hinders job creation because small- and medium-sized businesses create two out of every three new jobs. During the 1980s, when the size of the Federal Register, which publishes all new regulations, was considerably smaller, a net of 19 million new private-sector jobs were created - almost entirely by small- and medium-sized businesses.

Overregulation makes it increasingly difficult for ordinary citizens to know what is expected of them, which causes them to fear the government and question its competence. It creates a perception that government does not respect the liberty of its citizens. As small-business advocate Ed Roberts said during an Indianapolis forum: "If you want to find [small-business people] in technical noncompliance with one of the myriad regulations that are out there, you will always be able to do so, because they will never have a chemist, they never will have a law department, they will never have a staff accountant, they will never have an EEO specialist or any of those kinds of experts, because they can't afford to have them"

The Indianapolis forum also heard complaints about the overregulation of the dry-cleaning business from an exasperated Debbie Barnett: "Not only do we have to live with [Occupational Safety and Health Administration! …