Regulatory reform is an evergreen aspiration because, even when an administration that makes it a priority assumes office, it often hesitates when the outcomes of any reform begin to have political consequences. The Trump administration has declared that the executive branch agencies and the administrative state they created are choking economic growth and must be pared back. Most people who work in regulatory policy can provide examples of how this is true and what might be done to change it. But so far, the White House has avoided getting into the particulars of how to reduce this regulatory “sludge.”
Instead, it deferred to Elon Musk and his “DOGE” team of computer programmers, who (implausibly) promised to use their technology tools to discover redundant and unneeded regulations and promptly eliminate them, the Administrative Procedure Act be damned. The White House also announced an absurd and unworkable requirement that agencies jettison 10 existing rules for every new rule they adopt.
There are advantages to a broad, ill-defined approach to tackling the excessive regulatory state: It allows politicians to retreat if a particular outcome causes heartburn for the president, a cabinet secretary, or a committee chair. Even the most promising regulatory reform thus far—the pledge to subject all regulations emanating from independent agencies (including the Federal Reserve) to the formal rulemaking process and benefit–cost analysis—does not necessarily preclude political exigencies from allowing unproductive regulations to be introduced.
There are better ways to approach such reform. In the following pages, several prominent policy scholars with a deep familiarity of the regulatory process offer suggestions for an administration that earnestly wants to pare back the regulatory state in a productive way.
Stuart Shapiro recommends the administration change the Paperwork Reduction Act to reduce the cost of federally mandated data collection that plagues many firms. He also encourages a bipartisan effort to reduce regulatory restrictions that are unambiguously harmful to nearly everyone and can be easily explained to voters—and politicians. Tom Kniesner and Kip Viscusi extol the benefits of retroactive benefit–cost analysis of rules when empirical data can be discerned. A few nascent efforts by think tanks—such as the Mercatus Center—have attempted this, but to little effect; an agency might have a better outcome. Former OIRA administrator John Graham and Keith Belton discuss the problems that so-called regulatory gatekeepers—ostensibly in place to protect workers or the environment—cause in the process. Finally, former Department of Labor chief economist Ronald Bird proposes a reform to the Administrative Procedure Act that would more clearly define how an agency should do benefit–cost analysis and consider precisely who benefits and pays the costs, and who has standing in such an analysis.
If the Trump administration wants to reboot its efforts, or if a future administration wants to combat the regulatory sludge, these suggestions would be a good place to start.
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.