Report: Reducing Regulatory Agencies’ Authority Could Boost Economy, Increase Job Creation

Agencies should be abolished, eliminated, or reformed to offer better outcomes for businesses and consumers

EPA headquarters in Washington, D.C. / Wikimedia Commons
August 16, 2017

Reducing some of government's regulatory agencies' authority could boost economic growth and increase job creation, according to the Competitive Enterprise Institute's report Shrinking Government Bureaucracy.

Regulations cost the economy $2 trillion each year, and the institute has detailed steps for the Trump administration and Congress to follow to rein in government overreach and reduce regulatory burdens for businesses and entrepreneurs.

"Some of these reforms can be achieved via executive action, while others will require Congress to take back authority from federal departments and agencies," the report states. "For too long, Congress has allowed federal agencies and regulators to gather too much power, resulting in a bloated, unaccountable bureaucracy that imposes costs and hinders innovation throughout the U.S. economy."

First, the institute says the Environmental Protection Agency has avoided congressional oversight with regard to its budget so Congress would not know how the agency spends taxpayer dollars. The report says the EPA's budget should be transparent and certain aspects of the agency should be abolished, eliminated, or reformed because they are redundant.

For example, CEI suggests the agency's regional offices should be abolished and their capabilities transferred to the Federal Emergency Management Agency. The report also suggests that the Healthy Communities and Smart Growth Programs, the Environmental Justice programs, and the Environmental Education programs should be eliminated.

Second, the report suggests that the Department of Commerce be reformed, since many private sector companies already do what the agency does in seeking trade opportunities and conducting market research. The Institute says that some government activities should be moved to qualified agencies and some parts of the Commerce Department such as the National Weather Service should be privatized.

Third, the report recommends the Federal Deposit Insurance Corporation lessen the risk to taxpayers by return the coverage limit to $100,000 and that the goal should be to eliminate it entirely. "FDIC policies unfairly make all taxpayers liable for decisions made by banks and their customers," the report said. "This gives financial institutions incentive to disregard risky behavior and provides a false sense of security to consumers."

Fourth, the institute says the Consumer Financial Protection Bureau puts undue burdens on American consumers, the financial system, and small lenders, and the agency should return authority to the Federal Trade Commission.

"The CFPB's authority is unconstitutional, with little to no oversight from the president or Congress," the report states. "The White House should work with the House and Senate to make the Bureau's head directly accountable to the president, remove its supervisory role over banks and credit unions, and return authority over policing deceptive business practices to the Federal Trade Commission."

Fifth, the Securities and Exchange Commission, which the institute says imposes restrictions on entrepreneurs and investors to raise the money they need, should have their authority rolled back by making changes to the Sarbanes-Oxley and Dodd-Frank acts.

Finally, the institute says the National Labor Relations Board should be eliminated since it has become highly politicized and causes uncertainty for rules that businesses rely on. In addition, large parts of the Federal Communications Commission should be abolished so that the media and communications markets can offer lower prices for better technology.

"Neither clarity nor efficiency in government has improved in the past eight decades," said Kent Lassman, president of CEI. "The federal government's multitudes of offices, boards, commissions, and agencies are not at all organized and surely not suited to the task of responsible government. It is long past time for Washington to focus on regulatory reform."

Published under: Economy