Problem
State and federal bureaucracies have dramatically increased their power over the past few decades. Regulations crafted by the numerous departments and agencies of state and federal executive branches have had wide-ranging impacts on businesses and consumers in the United States, have harmed economic growth and job creation, and have limited consumer choice.
According to a 2016 study by the Mercatus Center at George Mason University, the U.S. economy has been slowed on average by 0.8 percent per year since 1980 due to the cumulative effects of regulation. The study estimates if the regulatory burden placed on the economy had been held constant at levels observed in 1980, the U.S. economy in 2012 would have been about 25 percent larger than it was. More attention needs to be paid by legislators to the effects regulatory laws continue to have on businesses, workers, and consumers.
Policy Solution
State-based versions of the federal Regulations from the Executive in Need of Scrutiny (REINS) Act would accomplish this by encouraging legislators to more carefully monitor the laws it passes and their possible effects.
A REINS Act aims to limit the growth of a state’s regulations and bureaucracy by requiring the legislature to give final approval to any regulation that imposes an economic impact of a certain amount.
In Wisconsin, a recently passed REINS Act places this threshold at $10 million. If an agency proposes a regulation over that threshold, it will need to ask the legislature to introduce a bill to authorize the regulation, modify the regulation to lower its cost, or pull back the proposed regulation.
Policy Message
Point 1: State bureaucracies have dramatically increased in size and power over the past few decades.
Point 2: This growth has had huge impacts on individuals and businesses across the United States, affecting economic growth, job creation, and consumer choice.
Point 3: Legislators need to increase the attention paid to the effects of regulatory laws on individuals, businesses and workers.
Point 4: The REINS Act accomplishes this by encouraging legislators to more carefully monitor the effects of the laws they pass.
Point 5: The REINS Act requires legislators to give final approval to any regulation
Point 6: There is no bill better suited for cutting back on the scope and power of government.
Point 7: The REINS Act gives legislatures the authority to limit the power of bureaucracies while leaving agencies appropriate flexibility to implement new regulations.
References
Bentley Coffey, Patrick McLaughlin, Pietro Peretto, The Cumulative Cost of Regulations, Mercatus Center, April 26, 2016: https://www.mercatus.org/system/files/Coffey-Cumulative-Cost-Regs-v3.pdf
Matthew Glans, “Wisconsin Considers State REINS Act,” Research & Commentary, The Heartland Institute, June 13, 2017: www.heartland.org/publicationsresources/publicationsresearch–commentary-wisocnsinconsiders-state-reins-act
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For more information, contact The Heartland Institute at 312/377-4000 or by email at [email protected], or visit our website at www.heartland.org.
Tim Benson joined The Heartland Institute in September 2015 as a policy analyst in the Government Relations Department.
Matthew Glans joined the staff of The Heartland Institute in November 2007 as legislative specialist for insurance and finance.
