Regulatory Reform: No Silver Bullet
• complete the economic deregulation agenda, • focus on substantive regulatory legislation, • evaluate proposed regulations against a broad range of standards in addition to the benefit/cost standard, • broaden the guarantee of just compensation to all property owners who are mandated to provide a public benefit, and • approve an omnibus regulatory reform act and a congressional Office of Regulatory Analysis only if Congress reasserts its authority to approve all final rules.
Federal regulations now impose on the private sector direct compliance costs of about $500 billion a year. This is an average cost of about $5,000 per private-sector employee, with relatively higher costs per employee in the manufacturing sector and in smaller firms.
The cost of federal regulation has been a relatively stable share of gross domestic product in recent years, but the apparent stability masks two contrary trends: Federal economic regulation has been declining for about 20 years, with substantial deregulation of agriculture, energy, financial services, telecommunications, and transportation. Electricity deregulation will soon follow, along with a continuing reduction of barriers to international trade. Over the same period, however, the regulation of health and safety, the environment, and employment relations has been increasing sharply. A reduction of the relative burden of regulation will require a continued effort to reduce the remaining economic regulations; major changes in the legislative authority for the regulation of health and safety, the environment, and the workplace; and much more effective administration and congressional review of both existing and proposed regulations.