Don’t Ignore the Mess You’ve Already Got: Why Comprehensive Regulatory Reform Requires Backward-looking Analysis

Last week our friend HHS Assistant Secretary for Administration for Children and Families (ACF) Alex Adams lent his pen to the Washington Post to highlight the need to “clean out the regulatory closet” from time to time. We’ve echoed this sentiment on multiple occasions (Wolfson; Bull).

What’s fascinating is how often well-meaning regulatory reformers forget that you can’t solve the red tape problem without assessing and cutting the red tape already strangling your state. For all the talk of regulatory reform, most states have focused their analysis on ways to slow down the growth of the administrative state, rather than doing the often tedious and thankless job of cleaning up the existing corpus of regulations.

As Alex writes, “The result is a one-way ratchet: New requirements are added while old ones linger.” And unfortunately, that is the pattern we see repeated over and over again across the country. Leaders come into office motivated to make the world better and fix problems, but they do so by passing laws and making reforms, not by digging around in a musty basement to find old files that limit citizens’ freedom to use their land or run their businesses.

But that’s exactly the kind of work that has to happen if you want to reduce the red tape holding back a state.  And it’s why we at the Fulcrum Foundation fully support compulsory regulatory sunsets rather than only focusing on how to improve the regulatory process (or even the regulations themselves) in the future.  

A regulatory sunset is an automatic lever to require the government to justify its rules – and if implemented well, it will also give the public multiple chances to share their concerns about existing regulations before they are reinstated. As Alex noted: “The most important reform is a change in the status quo. A regulation, guidance document or administrative requirement should not survive today merely because it survived yesterday. Every so often, policymakers should have to show why it still belongs there.”

That’s why Idaho’s example, and Assistant Secretary Adams’ efforts to replicate it at ACF, is so worthwhile.  When Alex worked for Governor Little, they turned the legislature’s decision to not reauthorize any regulations into a motivating factor to implement zero-based regulatory budgeting – starting from scratch the administration made every agency justify every single regulation. This process inevitably found that many regulations could not justify their continued existence, and Idaho wound up cutting nearly half of its regulations.  Under Alex’s leadership, ACF has now rescinded some 74 percent of the agency’s guidance documents – cutting significant burdens on every state, nonprofit, and organization that operates within ACF’s regulatory authority.

If states across the country were merely half as successful in reviewing and rescinding unnecessary regulations, we would expect billions of dollars in savings and greater business growth. According to Patrick McLaughlin, if states could eliminate 40 percent of their regulations, their GDP would grow by an additional 1.5 percent. Virginia’s efforts to remove gold plating from the international building code reduced projected construction costs for a new home by $24,000.  And that economic growth, coupled with lower costs, can make a real difference for the millions of Americans who want to provide for their families.

But it takes real work – and that’s why we’re excited to be part of the Fulcrum Foundation team. The hard work of cleaning up the red tape mess begins with a commitment to scrutinize everything, and Fulcrum stands ready to help states across the country do just that.