Congress Reins In Regulatory Beast

By Bonner R. Cohen
Copyright 1999 Investor's Business Daily
March 17, 1999



It's hardly fashionable these days to say something good about Congress. But we must give credit to a group of hardy souls who are taking on America's Leviathan-like regulatory structure.

The House and Senate are taking some impressive legislative steps in the war to cut red tape.

Last month, the House passed 274-149 the "Mandates Information Act of 1999" (H.R. 350). The bill is the brainchild of Reps. Gary Condit, D-Calif., and Rob Portman, R-Ohio.

Their bill targets "hidden taxes" -the costs imposed on consumers and businesses as a result of federal mandates. It requires any legislation imposing private- sector costs of $ 100 million or more to be subject to a "point of order" in Congress. That would require a 20-minute debate and then a vote on whether to strike the mandate. House members would need just a simple majority to get rid of the costly mandate.

"Hidden mandates are an unfair tax on American consumers. It's just basic common sense for Congress to know the costs of legislation," said Rep. David Dreier, R-Calif. The bill forces Congress to look before it leaps and, with its up-or- down vote, keeps lawmakers accountable for the burdens they place on the rest of society.

The bill has impressive backers: the National Governors Association, U.S. Conference of Mayors, National League of Cities and National Conference of State Legislators are just a few.

The House has also set its sights on the reams of paperwork Washington bureaucrats dump on unsuspecting small businesses. Twenty-four hours after the Condit-Portman bill passed, lawmakers approved 274-151 the "Small Business Paperwork Amendments Act of 1999" (H.R. 391). Rep. David McIntosh, R-Ind., sponsored the bill. It amends the Paperwork Reduction Act of 1995, which called for a 20% reduction in federal paperwork burdens over four years.

Despite the 1995 law's noble intentions, paperwork actually increased by 2.3% in 1997 and 1% in 1998, according to the White House Office of Management and Budget (OMB). Americans spent an incredible 7 billion hours on paperwork in 1998 at a cost of $ 229 billion, OMB reported.

Unlike large corporations, most of America's 22 million small businesses lack the legal expertise that can keep them from making mistakes when filling out the mountains of paperwork thrust upon them. Fines for such errors can be stiff, forcing many small businesses into bankruptcy. The McIntosh bill offers overburdened small businesses relief:

* It waives civil fines for minor, first-time paperwork violations if the small businesses correct the infractions within six months.

* It requires federal agencies to create a hotline for small businesses that need answers and guidance when filling out federal paperwork.

* And the bill establishes a task force to study the feasibility of streamlining reporting requirements for small businesses.

The McIntosh bill won't hinder law enforcement or civil fines. Congress doesn't want to impede the prosecutions of criminal activity, including drug crimes, IRS violations or threats to the environment, health and safety.

Things are also stirring in the Senate. Legislation introduced by Sens. Fred Thompson, R-Tenn., and John Breaux, D-La., helps the public assess the costs and benefits of regulations originating in Washington.

Their "Regulatory Right-to-Know Act" (S. 59) requires the OMB to issue an annual regulatory accounting report, showing the costs and benefits of federal regulatory actions. In addition, the OMB would be instructed to issue an analysis of the impact of regulations on governments, the private sector and the nation's economic growth. The bill also requires the OMB to make recommendations for reforming outdated or wasteful regulations.

As sensible as these modest initiatives are, they are already being viewed with hostility by a White House determined to keep power concentrated in the hands of unelected bureaucrats. The White House has threatened to veto the bills aimed at exposing any hidden taxes or cutting paperwork. Mayors, governors and citizens already feel the costs of federal bureaucracy. Fortunately, Congress is learning that Washington doesn't always know what's best.

We have a long road of reform ahead of us, though. As Competitive Enterprise Institute economist Clyde Wayne Crews observes, American families currently spend more on regulations than they do on food, clothing, transportation, medical care, recreation or savings.

Clearly, America needs protection from federal regulation and intrusions by Washington.

Bonner R. Cohen is senior fellow at the Arlington, Va.-based Lexington Institute and editor of EPA Watch.


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