Ruinous Red Tape: Epic Cost of Unchecked Federal Rule Making

[00:00:00] Joe Selvaggi: This is Hubwonk. I’m Joe Selvaggi. Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. Overlooked in the current election year political rancor are the largely hidden costs of the myriad rules and regulations promulgated by our federal government. While politicians promise to promote growth in their stump speeches, estimates of the drag of federal red tape on our economy exceeds 2 trillion annually, placing its burden for the average American ahead of income taxes and health care.

[00:00:31] Recorded in the 243 volumes of the Code of Federal Regulations, these largely executive branch agency rules are created and enforced with little or no transparency and largely beyond the reach of Congress. The branch constitutionally tasks with all legislative responsibility. Cloaked in opacity and beyond any accountability to the voting public, this administrative regulation machine now creates 44 new rules for every law passed by Congress and is on track to consume 16 percent of the nation’s income in compliance, costs, and diminished capacity.

[00:01:07] How did such power and authority to regulate the nation’s economy get abrogated to unaccountable executive agencies? And what can elected representatives do to slow or reverse the sclerotic control that costs Americans nearly 8 percent of their GDP? My guest today is the Fred L. Smith Fellow in Regulatory Studies at the Competitive Enterprise Institute, Wayne Crews.

[00:01:33] Mr. Crews has just released CEI’s annual report entitled 10, 000 Commandments, sizing up the federal government’s new rules and regulations. which offers a comprehensive look at the way in which federal regulations impose costs on state governments, small businesses, individuals, and the broader economy. We will discuss how and why the administrative state evades transparency and resists the scrutiny that attends other public policy concerns like taxes and spending.

[00:02:03] We will consider ways in which new leaders and administrations could promote greater accountability for existing codes and encourage more reticence towards regulating future emerging technologies. When I return, I’ll be joined by Competitive Enterprise Institute fellow, Wayne Crews. Okay, we’re back. This is Hubwonk.

[00:02:23] I’m Joe Selvaggi and I’m now pleased to be joined by the Fred L. Smith Fellow in Regulatory Studies at the Competitive Enterprise Institute, Wayne Crews. Welcome to Hubwonk, Wayne.

[00:02:34] Wayne Crews: Hi, Joe. Thank you so much for having me. I appreciate it.

[00:02:36] Joe Selvaggi: Well, I’m thrilled to have you. I am familiar with CEI. I think not long ago, Pioneer hosted an event with, I think, your executive director, regarding the Moore v.

[00:02:45] United States Supreme, Moore v. U.S. Supreme Court case. And it was a great event. for joining us. But we’ve not had you on our show before, so this is the first time. Let’s start at the beginning for our listeners who don’t know what CEI, the Competitive Enterprise Institute, is at a high level. What is the mission of your think tank?

[00:03:03] Wayne Crews: Well, thanks for asking. CEI, founded in George Orwell’s year, 1984. We’re coming up on our 40th anniversary this year. Founded by Fred Smith. And we emphasize the regulatory state. we were one of the earlier think tanks, not too many years after Cato got started, but there are a lot of groups in town. We’re in D.C. A lot of groups in town working on tax and budget, the wars, social issues. We tend to focus on the regulatory state. So, a lot of labor regulation, environmental regulation. And I tend to take a So I think it’s important to have a broader look at it. That’s what, that’s what I do with my work. The whole scope of the regulatory state compared to taxation and spending is a big emphasis of mine.

[00:03:44] Joe Selvaggi: Well, again, I think for, I hope for our listeners they’ll take away from this conversation that, the regulatory state isn’t trivial. It has a substantial impact on all our lives, substantial costs. So, I want to, talk specifically about the report that you just released.

[00:03:58] It’s an annual report. I think you’ve been working on it for nearly two decades or maybe even longer, entitled, 10, 000 commandments. I like that twist. 10,000 commandments sizing up the federal government’s new rules and regulations. you worked hard on this as an extensive report talking about, all the rules and regulations, promulgated each year, this year included. What is though the purpose of this report? Why do you do this work every year?

[00:04:21] Wayne Crews: Yeah, 10,000 commandments. It’s actually been 30 years that I’ve been doing this thing. So y’all are getting old. But look at it this way. We know the federal government spends 6 trillion annually now. We hit that level back during the CARES Act, and we haven’t gone back.

[00:04:40] We also know the federal government’s in debt. Over 35 trillion. We just crossed that threshold very recently, but things are different with regard to the regulatory state. When I got started with this report, it was back in the 90s. I was a student at George Mason University. I was fortunate to study under James Buchanan, who had won the Nobel Prize.

[00:04:58] Prize in economics at the time. I got interested in public choice economics and the way governments are influenced and the way their output of spending and regulation is influenced. There’s a lot of work done on judiciary with regard to the growth of government and so forth on the and the legislator to legislative side as well.

[00:05:16] But I got interested in regulation. I started putting this report together. We would often refer to us in the movement, we would often refer to regulation as like the hidden tax. You can look up what the federal spending budget is, you can see outlays, you can see revenues, you can see deficit, nothing like that for regulation, and to a large extent there still is not.

[00:05:38] But I started compiling the 10,000 Commandments report, looking at rules in the Federal Register, number of pages in the Federal Register, and to the limited extent we could get them, the cost of those regulations, and we might hit on it a little bit in this conversation, but I’d mentioned 6 trillion in government spending. I use a placeholder benchmark for federal regulatory cost of about 2 trillion, and we can talk about how that compares to other metrics as well.

[00:06:05] Joe Selvaggi: That’s good. I’m glad I didn’t know that connection to you. And, James Buchanan, of course, we do talk about public choice theory here on the show that, essentially government doesn’t necessarily, have the same incentives you and I have. They aren’t always, particularly the other, administrative state aren’t always really, working to serve the individual constituents more or less. They have other incentives, and we won’t go into that in this, in this show necessarily, but. What I always try to answer for my listeners, either, at the beginning or somewhere in the show, is why should I care about this? Why should I care about rules and regulations? You throw out a number, of two trillion dollars, that’s a big number, two thousand billion dollars annually, but it’s a big number that people may not understand. How would, let’s say, at a high level, you’re looking at ten thousand commandments, how would that manifest in our daily lives? Where would that cost, most of us? Any one of us.

[00:06:54] Wayne Crews: Great question. I would think about it this way. If we desire limited government, we desire government that’s not trying to do too many things. I always say, pick a national bird and then hold back, but federal government spends a great deal of money, but it also regulates a lot.

[00:07:09] I called it a hidden tax and I said 2 trillion, but the way that percolates down, if you imagine, Those 2 trillion in regulatory costs. Now, we’re talking economic regulation of finance insurance, labor regulation, health and safety regulation, environmental regulation in particular, paperwork costs and things like that.

[00:07:28] That 2 trillion would percolate down to the household level, if you just imagine straight flow through, of about 15, 000 per household per year. And the way to look at that is that’s the biggest item, hidden cost of regulation would be the biggest item in the family budget, incorporating everything, the largest item in the budget, except for housing.

[00:07:51] So, bigger than transportation, bigger than, food costs. entertainment, bigger than savings, so it’s an enormous amount of money, that’s the reason people should care, but you’re right, it is hard to get that attention, and sometimes what we find works, and the one thing I can tell you that is probably the only thing that perks up Washington actors to do something about it is when small business gets overburdened with regulation or state and local gets burdened with overregulation.

[00:08:19] They complain about unfunded mandates, but it’s very difficult to break through. We continue to do it. I think we have successes in the distant past, we had success with, with some regulatory reforms that we could talk about that ought to be, in my view, Amplified. There are things that we need to do now to make regulations more transparent, just as transparent as the budget is.

[00:08:40] Joe Selvaggi: So, I, all three cheers for the, transparency. So, I think we’re going to address that in our conversation, but as you say, it’s hidden, perhaps deliberately hidden. Now you mentioned that raising taxes isn’t popular with public figures, so, but nevertheless, power and control is on the agenda of virtually every political politician, and party.

[00:08:58] so this is sort of a backdoor approach to ensuring they, their preferences are imposed on all of us, and they’re quite costly but before we get into, all the, details of your report, how does your report get built? Clearly you’re not going to the files, and counting all these regulations.

[00:09:14] Is there a federal agency that’s tasked with measuring and quantifying how many pages of regulation exist in the federal government?

[00:09:21] Wayne Crews: Well, well, whether they do it or not is kind of a yes or no thing. You know, what I’ll do is I’ll go on to the federal register for. Listeners who don’t follow this stuff, and I would suggest they don’t, but the Federal Register is the daily depository of rules and regulations.

[00:09:38] That’s the baseline and comes out every day. It’s the daily depository in the world record. Well, the U.S. record Federal Register happened under Obama when it hit 95,000 pages. Last year, we got the second highest count under Joe Biden of just under 90, 000 pages. This year, Joe, we’re on track. With the federal register being over 100,000 pages.

[00:10:02] So we’re entering an era where we’re going to have a million federal register pages per year. So, the register is one thing. The, in that register though, you get each day’s rules, and the way things are breaking out now, there are always 3, 000 rules every year, at least. We got a little bit below that one year under Trump, but there are 3, 000 regulations that come out every year.

[00:10:23] So we tally those up. The OMB, the White House Office of Management and Budget, is supposed to be tracking these costs. You were asking about where this information comes from. Unfortunately, the Regulatory Right to Know Act that, by which OMB is directed to track regulatory costs, is basically ignored.

[00:10:45] They haven’t done an aggregate cost estimate now in 20 years. So, what I do, I use a placeholder using the best we can find with the government data and some private data. Even the annual reports from OMB gives you the cost and benefits of a few dozen at most extra rules. I tally those up, but That’s just a fraction of the 3, 000 rules that are in play, so you use a mix, you look at what, what studies are out there. For example, there’s a great National Association of Manufacturers study of regulatory costs. Now, they use regression analysis and all that stuff that I forgot about since way back in the days of, studying economics at George Mason, but they do an analysis and come up with a 3 trillion estimate as we’ve been talking about my, what I call a 2 trillion placeholder.

[00:11:31] So you take, you step back, you try to look at what the federal budget does, and my goal in 10,000 Commandments, and my goal in getting policymakers to pick up on this kind of thing, in the regulatory cost budgeting vein, is to make regulatory costs transparent, like we talk about, numbers of rules and regulations transparent, the significant rules and so forth transparent, and publish all this stuff in something like the historical tables of the federal budget, so I can quit writing this report.

[00:11:58] Joe Selvaggi: All right. Well, that’s great. And again, I, your report is getting, not quite a, a million pages long, but it’s quite long, so, so it’s a challenge. I got through it, but, uh, you know, it takes some time. It’s quite comprehensive. I’m just curious for, I’ll get meta on you.

[00:12:11] You’re talking about volumes and volumes of regulations. Uh huh. Beef with regulations and rules. Is it the quantity? because often in, in our conversations here on the podcast, we talk about the fact that, and we’ll get into this a little more deeply, that it’s as much a problem with the vagary of rules as it is the quantity of rules.

[00:12:28] In other words, if Congress says to, an executive branch agency, make the air clean and, workplaces safe and let’s all, get along. What, agencies then do is sort of run with those vague guidelines and impose a myriad of rules really is sort of you know, we, we migrate from this country of where we think we’re governed by rules rather than men. And there’s so many rules, so many vague rules that effectively, it’s the regulator’s prerogative to do whatever he pleases. Is it? Quantity of rules or is it the vagary of rules that, that is really your bugaboo?

[00:13:03] Wayne Crews: it’s both. And look but let me say something about the vagary in terms of the costs of regulations.

[00:13:08] and there, there are plenty of academic analyses of this kind of thing too, but the uncertainty created just by the presence of the regulatory state is a cost in and of itself. And that’s been, I’ve seen that tabulated at tens of billions of dollars when companies just don’t know what to do, but it’s also the volume.

[00:13:25] And there, we do have this situation, as you describe, of this split, it’s supposed to be Congress that’s the lawmaker. That’s how the Constitution set it up. Fred would joke, the Constitution isn’t perfect, but it’s better than what we have now. The Constitution says that the Congress makes the laws.

[00:13:44] And that’s it. There’s nothing in there about a gigantic administrative state like we have now. Now, it’s been set up during the 20th century. It got, it’s rubber stamping with the 1946 Administrative Procedure Act and things like that. But it’s supposed to be Congress that makes the laws.

[00:14:01] And, speaking of that vagary, just for example, last year Congress issued 65 laws. And remember I said there were 3, 000 regulations. I called that the unconstitutionality index. There were over 40 regulations for every law passed by the ones we elect. We don’t elect the administrative agencies. So that’s one important thing to note.

[00:14:22] The agencies get to do the bulk of the lawmaking. Now, It is the case that a recent Supreme Court decision overturned something known as the Chevron Doctrine by which the courts would defer to agencies on their interpretations of what is unclear in, in federal statutes, and as long as the agency’s interpretation was reasonable, the court would say go along with it.

[00:14:48] That’s been overturned. So, there’s optimism in the Free market, small L libertarian, conservative community, what have you, that overturning of the Chevron, of Chevron deference in the Loper Bright decision related to fisheries and them having to pay an inspector to go out on the boats for them.

[00:15:05] Joe Selvaggi: We’ve done a few podcasts on Loper Bright and Chevron.

[00:15:09] Wayne Crews: It’s an extraordinarily important issue. And I just, I had the opportunity just last week to testify in Congress. on the topic of Congress in a post Chevron world. And the warning I gave And I think it relates a lot to what you’re hitting at on the quantity and the uncertainty, because it’s not just those 3,000 rules that agencies issue, but they also issue sub regulatory guidance documents, and these go by a lot of names like, you know, notices, bulletins, circulars, administrative interpretations, letters, all these manifestations that we took to calling regulatory dark matter.

[00:15:45] So if agencies are now going to be reluctant. to issue a new notice and comment regulation because it might not conform with the new strictures in the wake of the Loper Bright decision. I’m concerned that they will resort more to guidance documents as a workaround. And so, I wrote a, I wrote an article in Forbes, and some of this is in, in the narrative in 10, 000 Commandments, but I called it Deep State Guide to Post Chevron Regulating, and they’ll definitely do it.

[00:16:14] And unfortunately, Joe, one of the, while you and I, and a lot of us, I mean, a lot of me, I mean, my whole career, but, and a lot of my pals. Our emphasis has been on rolling back the administrative state and its bulk rules and the uncertainties and manglings that it creates. But in the wake of the COVID episode, we had the CARES Act, the Infrastructure Law, the American Rescue Plan, the Inflation Law, the Chips and Science Act.

[00:16:47] Joe, all of those bills, they’re hyperspending. But not only are they extraordinarily costly, they’re also hyper regulatory at the same time. So, you, it’s great that we have this new change in Chevron deference, but unfortunately, the Congress has delivered all of this new regulatory power just in the last five years.

[00:17:09] Now, it’s a separate topic for us to talk about, but I think, we’re going to have something I call an Abuse of Crisis Prevention Act to prevent that kind of overreaction to a crisis. We had it with the financial meltdown. We had it with 9 11 and so forth. Every time there’s a crisis, there’s a big lurch, adding to the quantities and the uncertainties that you’re talking about.

[00:17:29] And it’s going to, unfortunately, it’s going to make my 10, 000 Commandments report a lot fatter next year as all the rules, even the ones that are not agency over interpreting or misinterpretations of statute, just those laws themselves are going to lead to percolations of new rules. And I think we’re already starting to see that.

[00:17:48] In the 10, 000 Commandments report, I had noted that you’re starting to see upticks in significant regulations overall and with respect to business and state and local governments and things like that. So, you hit on a really important point. When we talk about regulations, it’s the quantity, it’s the uncertainties.

[00:18:07] But it’s also, unfortunately, it’s not just congressional over delegation of this power to agencies, but now we have a bit of a crisis in Congress’s own disregard of its enumerated powers that’s inflating both the spending and the regulatory state. So, we’re going to have kind of a grand unification theory of dealing with spending and regulation at the same time, because unfortunately they’re going too much hand in hand now.

[00:18:31] Joe Selvaggi: Yeah, indeed. I want to get into more specifics because, again, we’re at the high level, but I imagine that, again, I think we hit on this when we think about, given this myriad of rules that, that it’s virtually impossible either to conform to all of them, even if you’re well meaning, but because they’re so vague and they’re so, so complex and there’s so many of them, you’re almost certain to be breaking the rules in anything.

[00:18:53] So fear of breaking rules is a natural part of it. deterrent to innovation, investment, new ideas, meaning, if I’m inevitably breaking a rule, crossing the sidewalk, I’m not going to cross the sidewalk, which is a drag on, American ingenuity, productivity.

[00:19:10] So let’s get more specific. You mentioned all the costs to small business. A lot of our listeners are small business owners. What would be examples from the federal level of this sort of, that, that would hinder there, or be costly to them as small business owners?

[00:19:25] Wayne Crews: What concerns me most about small business regulation right now, and luckily for small business, it was a generation ago, but we had something called the Small Business Regulatory Enforcement Fairness Act.

[00:19:34] They would look at things like, the, with employment law, with environmental laws that would kick in. The big ones for small business in recent years, of course, has been Obamacare and how those laws like that kick in as a small business grows. I think big concerns for small business recently have been items like The independent contracting rules that change how small business can make, and how the person who’s the independent contractor himself can set up his own employment arrangements and things of that sort, there have been changes with respect to, given that so, you know, a lot of small businesses are um, The, put it this way, the small business administration and the federal government could be doing a lot of great things.

[00:20:19] It had an office of advocacy that would always stay on top of rules affecting small business, implementing the regulatory flexibility act, making sure that new rules coming down the pipeline didn’t overburden small business items like, but rules, laws like the chips and science law, the inflation law, and so forth.

[00:20:38] Are using the contracting process and a lot of small businesses or contractors with, with federal government or with businesses that are. And they’re working in the progressive regulatory model into the contracting state that affects a lot of small business. and this is also the case for state and local.

[00:20:56] But any subsidies or contracting now are having to conform to what Biden calls it his whole of government agenda, and it encompasses things like net zero energy, climate crisis, competition policy, equity policy, and so forth, but I feel like the big concern for small business to watch out over the coming years is the way that government contracts are being changed to implement regulations behind the scenes, and it’s a similar situation for state and local.

[00:21:25] A lot of the money going out, say, to building schools. Or rolling out broadband or constructing buildings are having to conform with these new enhanced environmental rules and diversity and equity rules and so forth that are part of the new inflation law and infrastructure laws and things like that. So, I think those are where some of the percolating, the uncertainties you mentioned, some of those things are going to be percolating up.

[00:21:52] Joe Selvaggi: So, to be clear, if I want to do a contract that involves federal money, it could be a school or something, because of these conditions that are imposed, it’s going to be more costly because of environmental concerns. It costs more to have heat pumps instead of standard condensers. if the makeup of my workforce has to be a certain percentage female or minority, or blue-eyed left-handed guys named Joe, of course this drives up the cost of Production, which means all of us, because we’re taxpayers, the government doesn’t have its own money, it all comes from us. If the cost of, of complying with those rules elevates, and I’ve seen estimates it could elevate at 30%, so that school costs 30 percent more, we either get 30 percent fewer schools, or 30 percent more costly schools that, leaves less money for everybody else. Is that, am I summarizing your, I

[00:22:41] Wayne Crews: Yeah, that’s very important to mention, and one thing to note is, it’s raising the cost of doing business for the very ones who are allegedly the innovators and the ones who are starting up the, uncomfortable thing about a lot of this is the way business and state and local governments are being seduced.

[00:22:58] With all of this federal money, the last time we had major reforms, and I’d mentioned the Unfunded Mandates Reform Act, the Small Business Regulatory Relief Act. When those happened a generation ago, here in Washington, I worked up on the Hill at the time, you had small business here, you had governors here, all complaining about unfunded mandates.

[00:23:18] But guess what? When we’re, when we’ve got a federal budget now that’s six trillion and they’ve laid out all this money in the wake of these gargantuan pieces of mega legislation, the mandates are funded and it’s amazing to, but, but, you know, if, if, as the saying goes, if something can’t go on forever, it’ll stop and the money will run out one day and you will see that uprising from small business and from state and local governments.

[00:23:41] But right now you can go back and look at the, at the, I believe it was the. It wasn’t the governors. I believe it was the mayor’s conference. It was held in D. C. You had Kamala Harris in speaking. And what was fascinating about it was to watch these governmental leaders not, standing up and proclaiming the merits of federalism and the federal government doing its thing and the state and local governments doing their thing.

[00:24:05] the entire conference was a celebration of government money coming down to the federal level, to the state and local level, erasing these boundaries between the government layers that we would like to see. And getting them hooked on these federal, on the federal outlays and all of that money, all of that money, as that indicated is regulatory.

[00:24:24] It’s going into, it’s being allocated in certain ways, often through regulatory dark matter, like the rollout of broadband and so forth, the rollout of EV charging stations, to the extent we get them. I think there are like three. That’s an example. 1.7 trillion dollars to get three charging stations.

[00:24:41] There are a few, I keep, I see, I keep saying, they talk about these charging stations. I will, are they going to be like sheets? Are they going to have like a sandwich kiosk? And can I fill my coffee up and all of that too? Or is it just some station, with government money that nobody’s going to want.

[00:24:54] But that’s the unfortunate thing. A lot of the regulation kind of interferes. With the emergence of new kinds of sectors, new kinds of property rights, new kinds of infrastructures, everybody’s looking for that federal guidance, and it’s a big, I think it’s a big concern for small business and for state and local governments, for sure.

[00:25:13] Joe Selvaggi: It’s interesting. Yeah, I remember the time when we were talking about unfunded mandates. Little did we know that instead of having no mandates, we got funded mandates. So, of course it unfunded mandates, which is funded mandates. which, very interesting. Again, I hear the colorful stories about, you know, uh, dreaming, we need, electric school buses.

[00:25:28] And by the time the, everything was counted up. Each electric school bus we got cost 1. 6 million dollars, which, you can say, well, great, now we’ve got an electric school bus, but how many can we afford at 1.6 million dollars? Anyway, we’re getting off track. You mentioned, of course, all these, four letter acronym spending packages.

[00:25:46] We spent a lot recently talking about the sort of the sins of the executive branch, one of our three branches of government. Perhaps it’s The atrophy of our first art article one Congress that’s not doing its job well enough, but let’s just say we’ve got this, massive administrative state. the head of, the executive branch is the president. It does the person who’s in that chair in the, resolute desk, is he going to, does who’s in that office have an effect on what seems like this. Juggernaut of growth, does that matter or is this just

[00:26:15] Wayne Crews: Oh boy, on autopilot? Oh boy. it matters a heck of a lot. and it’s interesting you brought that up.

[00:26:20] When I first started getting interested in executive overreach, it was, it was here at CEI, it was 10 years or so ago, Obama was in office and he said, I’ve got a pen and I’ve got a phone. And if Congress doesn’t act, and he even did this in the State of the Union Address, if Congress doesn’t act, I’m going to go around Congress and we’re going to, we’re going to get things done.

[00:26:42] And of course, the media loved that. They all accepted that. I got curious about it, and that was when I first started compiling the notion of regulatory dark matter. I said, okay, we got these. we got the handful of laws, we got thousands of regulations, but the agencies are doing all of these other things.

[00:27:00] Obama is changing the Obamacare mandate with respect to small business without going back to Congress and changing the law. He’s just doing it. The Department of Labor was influencing the independent contractor rules. Like, like we were talking about before, franchising rules. All of these things were happening without Congress passing a law and without agencies even writing a rule.

[00:27:22] Well with Trump, so that it didn’t begin with Obama. This stuff goes way back. Guidance documents have been around for a long time. I think they’re now. Getting the attention that they deserve, but then you had Trump come in, and it took him a little while, but he did the one in, two out executive order, you might remember that, and this is directly related to your question about what, about it mattering with who’s in the driver’s seat.

[00:27:45] It ought not matter. If the government’s just picking a national bird, like I say, it shouldn’t matter what the president’s doing. and if Congress is just making a handful of laws for our protection. But Trump put a freeze on regulation. It wasn’t so much the one in, two out that was the driver.

[00:27:59] What really mattered was the cost freeze. And that did seem to work over the years. Of course, you pick the low hanging fruit, it gets harder to pull regulations out. He had also put in place, for the first time ever, portals for those guidance documents. Biden comes in, he’s the Edward Scissorhands of government disclosure.

[00:28:18] He got rid of the Trump executive orders. he got rid of the guidance document portals. So, it became more difficult to find guidance. And the Trump portals mattered a lot. I could track the stuff where I could never could before. So, it was important to do. Now Biden has come in. Day one, he issued a memorandum called Modernizing Regulatory Review.

[00:28:38] Just last year, 2023, he introduced an executive order under the same title, Modernizing Regulatory Review. And I featured it very, a great deal in the new edition of 10,000 Commandments we were talking about. But with that, he threw out all of the Trump, deregulatory measures and instead, in keeping with his whole of government agenda, and you’ve, if you’ve seen Biden, over the last two years, he would go out every week giving speeches in different cities, talking about the whole of government agenda, it’s going to be, there’s, junk fees and price controls he’s implementing and competition policy, there’s net zero energy here, there’s union labor here, all of these measures, Few, where the, where different agencies are working on climate, different agencies are working on equity, different agencies from USDA to Commerce to FTC are pulled in on competition policy.

[00:29:29] You can get rid of regular; you can even get rid of an agency and its mission is still continued. That’s unique under Biden. When you talk about the, the executive having that kind of influence, I think that, that has been extraordinary. Almost the notion that you can get rid of an agency and yet that.

[00:29:45] function in government still be in place when it ought not be. So Biden had this whole of government agenda and with his changes in the modernizing regulatory review executive order, he has switched it such that the little, early on we were talking about OMB doing cost benefit reports, that little bit of cost benefit analysis that OMB was doing, that marginal amount where OMB was Behaving as a watchdog, Biden has converted OMB through modernizing regulatory review into a cheerleader for regulation rather than a watchdog for it.

[00:30:18] So rather than OMB challenging agencies net benefit determinations, OMB is engaged in the pursuit of net benefits, so called, as the progressive wing sees them on issues like net zero and equity and competition issues. We’re seeing economic interventions rise, like, we thought back in the 70s and 80s, we thought everybody had agreed that economic regulation was a bad idea, but now it’s all back in force. So it really does matter who’s the president.

[00:30:47] Joe Selvaggi: Yeah, and independent of your political preferences and your faith in government, I don’t have a great one, but others do. We still believe in divided government, right? That’s the whole idea. I say it’s not unlike a parent having a, trying to divide a cookie with kids.

[00:31:02] One cuts it and the other gets first pick which half they want. It imposes, it, it keeps each other’s greed in check,

[00:31:08] Wayne Crews: Yeah. Well, we wanted the divided government to do that. We, we wanted one branch, legislative, judicial. We wanted them to offset each other.

[00:31:18] Now, unfortunately, except for some good changes with the Supreme Court, but it’s almost now like rock, paper, scissors, where they were growing it instead of checking it with each entity. after the pandemic in, 2020, you had states pushing for growth, you had all this money going out, and so we’re seeing the blur we’re seeing the blurring between, state and federal power, and we’re seeing there’s so many billions Joe, it’s now it was a study from the Congressional Research Service all the way back in 2019 that said Block grants in aid from the federal government down to the states were already at that time over 700 billion.

[00:31:55] So, they’re much, much beyond that now. So, one of the things we have to do in reducing this administrative and spending state is eliminate those block grant, those huge grants to states and return those functions back to the state level. So, we have big problems in separation of powers. As you note, I think we definitely have to address those.

[00:32:17] And go back, not go back to, but go forward to the notion of what is it that government’s good at? Our Constitution had done a good job of limiting government, enumerating powers, making sure there were distinctions between the federal branches and then from the federal and the state level. But now we’re getting a lot of the blur.

[00:32:39] Good things happening, for example, with regard to Chevron, as we’ve mentioned, and the notion of major questions doctrine where agencies can’t just make some gargantuan change on their own, that’s not rooted in statute, but there’s, When government is as big as it is now, it’s very difficult when we don’t see what any bounds are.

[00:33:02] So, a big part of the discussion on whether it’s spending reform or regulatory reform is what exactly is a government and what can it do? What does it do good versus what is, what should be left up to private sector and civil society?

[00:33:14] Joe Selvaggi: Sure, I mentioned, on last week’s podcast, at my local post office, they had run out of stamps.

[00:33:18] There was no stamps. It was stuck all over. I said, okay, here we go. so, again, so, again, we’ve talked about all the problems. And, how this seems almost insurmountable. I imagine our listeners are sitting there listening, saying, oh my God, the end is nigh. But what we, you’ve mentioned that the, Supreme Court has actually come through.

[00:33:35] Yeah. and actually, done a good job of saying, look, the tie actually goes against the regulatory state. In other words, if you can’t come up with a clear reason why you need a rule, you don’t get impose that rule, cheers for the Supreme Court. Yeah. Why isn’t Congress or, you know what?

[00:33:48] I guess as a segue into saying what can we do about it, our listeners are, they can despair, or they can, in a sense, vote for people at least. pretend to want to, roll back or at least limit or constrain, government. for those who think government can just constrain itself, I would say to my friends on the left, should the Department of Defense decide how much it should spend each year?

[00:34:11] And if the answer to that is no, why then is all the rest of the government, trusted to, to spend wisely? put your thinking cap on. So what should we do to encourage government to constrain itself?

[00:34:22] Wayne Crews: Well, that’s a good analogy and asking them about DOD. but on, on despair, our Fred Smith would, his new, his own newsletter that he would send out, he would call himself the despairing optimist.

[00:34:33] And I think that’s the way to look at it. I would never leave you on a negative note in concluding a podcast or a show like this, because I think, the future’s wide open and I’ll, I’ll often say, giving talks or testimony on this stuff that, most of the world’s wealth isn’t created yet.

[00:34:49] Most of the jobs aren’t created yet. Now, our general counsel, you say, yeah, Wayne, but most of the regulations haven’t been written yet either. but I don’t look at it that way. Most of the wealth is not written, not created, jobs not created, and so forth. And we would say, you don’t have to tell the grass to grow.

[00:35:03] You just have to take the rocks off of it. And we have big. We have great opportunities right now to not regulate the future, to not regulate the future, the frontier sectors, the way everything that I detail in 10, 000 Commandments has been regulated up to now. So, we don’t have to do to artificial intelligence or the genuine EV revolution, where people, which hybrids make tremendous sense and things like that.

[00:35:29] The genuine revolutions in communications and crypto and so forth. We have the opportunity to not administrative state them to death, the way we have done everything else, and there are different options for doing that. And as for the existing hairball of regulation, there are actually, and I think we can take a lot of comfort in this.

[00:35:55] Those reforms that happened back in the 1980s on small business and mandates and so forth, were extremely bipartisan. It was Harry Reid of Nevada who was leading the charge for the Congressional Review Act, the one that gives Congress a veto power over rules that’s so controversial now. And the one thing I think that’s holding back reforms now is what we discussed earlier about funded mandates as opposed to unfunded ones.

[00:36:20] That’s playing a big role now, but it can’t go on forever. But a lot of the reforms that are out there to be optimistic about are bipartisan. The notion of a regulatory budget, to cap cost of regulation, decide, well, how many lives could the federal government really save if it were, if we’re working optimally and use that, what you know, scientifically or, analytically to, cap what agencies ought to spend.

[00:36:45] that’s a Democratic idea that’s in Jimmy Carter’s 1980 Economic Report of the President. There was legislation on it from Lloyd Benson, the Texas Senator. And Treasury Secretary under Clinton. I mentioned Harry Reid about Congressional Review. The notion of a regulatory reduction commission has bipartisan pedigree.

[00:37:04] Unfunded mandates reform was a big bipartisan move. Small business relief has always been bipartisan when the stars align. I think you want the stars to align naturally, not being forced there, but, by bad debt, by downturns in the economy or anything like that. But. I do take heart in knowing that we don’t have to regulate the future the way we have.

[00:37:25] For the existing rules and regulations, there are a slate of reforms that when people are rational, we have bipartisan interest in them. So, I think we can overcome a lot of the administrative stuff, but we’ve got to overcome the enumerated powers crisis in Congress as well.

[00:37:43] Joe Selvaggi: Indeed. Okay. So, again, we’ve run out of time. I have a hundred more questions to ask you. I always want to give our listeners an opportunity to read the primary source, your report. Where can our listeners find your report and your writing?

[00:37:57] Wayne Crews: It couldn’t be easier to get the report. Just go to CEI. org, CEI.org, and you’ll have it. It’ll be up there on the front, and you can dive into all the great work my colleagues have done on there, too. And just have a blast.

[00:38:10] Joe Selvaggi: Yeah, it’s pleasant beach reading there, you got lots of graphs to make it easy, and lots of footnotes, so, it could keep you busy for the rest of the summer, catching up, it’ll curl your hair, I think, if, you know It’ll curl

[00:38:21] Wayne Crews: mine, it curled mine.

[00:38:24] Joe Selvaggi: No offense there, Wayne. So, okay, well, thank you very much. This has been a great conversation. I think it’s the start of a conversation for a lot of people. And hopefully now understanding that these regulations cost us in the ballpark of what we pay in federal income tax. This is a lot of money. It should matter. and it’s invisible. So, congratulations to you and your colleagues for making this costly, burden more visible and fighting the good fight. Thank you for joining me today on Hubwonk, Wayne. You’re a great guest.

[00:38:52] Wayne Crews: It’s been entirely my pleasure. Thank you so much for having me. Thank you for thinking of us.

[00:38:57] Joe Selvaggi: This has been another episode of Hubwonk. If you enjoyed today’s show, there are several Hubwonk and Pioneer Institute. It would be easier for you and better for us if you subscribe to Hubwonk on your iTunes podcatcher. It will make it easier for others to find Hubwonk if you offer a five star rating or a favorable review.

[00:39:14] Of course, we’re grateful if you share Hubwonk with friends. If you have ideas or comments or suggestions for me about future episode topics, you’re certainly welcome to email me at hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk