Regulation after COVID-19
One of the better policy responses to the COVID-19 emergency has been federal and state governments suspending regulations that impede the market from responding to consumer demand. Many of these suspensions concern health care specifically, from loosening regulations on medical testing to permitting certified health care workers to work across state lines, to permitting telemedicine. Others help the economy generally, like easing limits on freight trucking.
A lot more can be done—and will need to be done if the United States is to ease the coming supply shock from the disease. Here at Cato, we have plenty of recommendations: Peter Van Doren and I offer some here, Jeff Singer does here, and Chris Edwards does here. Plenty more come from other Cato departments like trade and immigration.
Many of these regulations have no sound public justification whether in or outside of an emergency. Rather, they are sops to various special interests, often to protect industries from competition. Our friends at the Competitive Enterprise Institute have created a jazzy hashtag for these regulations: #neverneeded.
So, after the COVID-19 emergency eases, what will become of the suspensions? If they help people in an emergency, why not keep them suspended and help people generally?
A Congress member’s office recently reached out to Cato for some thoughts on this. The temptation is to draft legislation saying that all regulations temporarily suspended for the COVID-19 emergency should become permanently suspended. However, there are some problems with that idea, including: (1) such a “shotgun” approach probably isn’t politically viable, (2) the suspensions are, in some cases, highly complex, and making them permanent will have unintended consequences, and (3) such a proposal might discourage policymakers from adopting further suspensions. Besides, some decisions that are wise in a crisis are foolish in more ordinary times.
We suggested that, instead of a blanket suspension, the federal government borrow some of the regulatory review policies used by states, including creating sunset review committees that must examine and re‐approve the suspended regulations before they can continue. We recommended two recent Regulation articles on these review policies, this one that discusses sunset commissions specifically, and this one on broader regulatory review mechanisms.
I’ve been working in regulatory policy for 20 years now, and almost every day I learn something new that amuses, amazes or angers me. As dry as regulatory policy may sound, it is an amazing repository of history, politics, and economics. If you’d like a crash‐course in regulatory policy, Peter has assembled a terrific reading list that opens with a few overview articles and then dives into specific policy areas. You can become a regulatory expert!
