Instead of Regulation: Alternatives to Federal Regulatory Agencies

Instead of Regulation: Alternatives to Federal Regulatory Agencies

Instead of Regulation: Alternatives to Federal Regulatory Agencies

Instead of Regulation: Alternatives to Federal Regulatory Agencies

Excerpt

As of 1980, some 136 federal regulatory agencies were in existence. Employing some 141,000 people, they accounted for about $8 billion of the federal budget. That figure pales in comparison to their total cost impact on the economy, estimated at well over $100 billion per year by Council of Economic Advisors Chairman Murray Weidenbaum.

The decade of the 1970s brought an unprecedented expansion in federal regulatory activity. Between 1970 and 1979, twenty new regulatory agencies appeared, compared with, for example, only eleven during the entire New Deal era. The current agency-staffing level is three times that of 1970. And current regulatory-agency expenditures are six times the level of 1970. Forty-one agencies doubled their budgets in the four years from 1975 to 1979. In 1970, the Federal Register ran to 20,000 pages. By 1979, it was up to 77,000 pages.

It is hardly surprising that awareness of the costs of regulation increased dramatically during the past decade, as economists and political scientists completed study after study on the performance of the regulatory agencies. It began to dawn on people that many of the agencies--particularly the old- line economic-regulatory agencies--had become advocates for and protectors of the industries they were intended to regulate. Other agencies, especially some of the newer ones, had become the tools of special-interest groups, single-mindedly pursuing the goal of eliminating perceived threats to life and health, with little consideration of the costs imposed or of alternative ways of accomplishing their objectives.

What began as a series of deregulatory recommendations by the Council of Economic Advisors under the Nixon-Ford administration reached the stage of serious legislative proposals during the Carter years. And, indeed, 1978 saw the passage of legislation to terminate the Civil Aeronautics Board no later than I January 1985, with the phase-out of most of its regulatory powers during 1979 and 1980. Before the close of the Ninety-sixth Congress, bills reducing the powers of the Interstate Commerce Commission, the Federal Trade Commission, and the several agencies regulating banking had also been enacted, and similar bills to rein in the Federal Communications Commission, the Department of Energy, the Food and Drug Administration, and the Occupational Safety and Health Administration had been seriously debated.

The Reagan administration has made deregulation one of the four essential components of its program for economic revitalization (along with tax cuts, spending cuts, and monetary reform). Among the president's first . . .

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