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Reining in Red Tape An Interactive History of Federal Regulatory Reform

Legend

  • Executive Order Rules issued directly by the president which have the force of law. Some presidents have tried to unilaterally reform the administrative state by passing executive orders EO’s may be overturned by a Congressional statute.
  • Government Statute Laws passed by Congress and signed by the President. When one party controls both houses of Congress, regulatory reform is more likely to take the form of a statute. Statutes carry more weight than executive orders.

# of federal regulatory restrictions

A count of binding constraints marked by words that create an obligation to comply, such as “shall” or “must” in the Code of Federal Regulations (CFR). Check out our Reference Page for details on data sources.

Combined agency budgets

($ millions adjusted for inflation) The combined annual budgets of regulatory agencies used for the administration and enforcement of federal regulations. Includes agencies whose regulations affect the private sector and excludes agencies that focus on taxation, entitlement spending, procurement, subsidies, and credit functions. Check out our Reference Page for details.

Total costs of federal regulations

($ millions adjusted for inflation) Annual direct costs to state and local governments, businesses, and individuals to comply with federal regulatory requirements. Does not include regulatory agency budget costs. Check out our Reference Page for details on data sources.

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Legend

Executive Order
Executive orders are directives passed down directly by the president. While they carry weight, they are far less intrusive or impactful as statutes.

Government Statute
Government statutes are regulations instituded by congressional approval (?) and can have a serious impact on the efficiency, profitability, and feasability of small businesses throughout the country.

 

The Takeaway

Over the past 70 years, Democrats and Republicans alike have passed 30 major reforms to make regulatory agencies more efficient and data-driven. 

The result? We're subject to a complex web of We're subject to a complex web of nearly 1.1 million federal regulatory restrictions, and that doesn't include overlapping state and local regulations! We spend almost 10% of our GDP, $16,000 per American household, each year on federal compliance, and have no reliable estimate of the social benefits we get in return. 

Small businesses who can't afford massive legal and compliance departments are the hardest hit, often facing unexpected litigation and penalties for rules they didn’t even know existed. As it becomes more risky and expensive to own a business, fewer and fewer Americans are starting new ventures:
 

Startup businesses here are defined as firms less than one-year-old employing at least one person besides the owner. Source: Kauffman Foundation. Federal restrictions calculated from the Code of Federal Regulations, the government publication that contains all final federal rules. Source: RegData 2.2, 1975-2014

Startup businesses here are defined as firms less than one-year-old employing at least one person besides the owner. Source: Kauffman Foundation. Federal restrictions calculated from the Code of Federal Regulations, the government publication that contains all final federal rules. Source: RegData 2.2, 1975-2014

“Unfortunately, no institution in the federal government now has, as its primary aim, the goal of targeting regulatory expenditures to their best uses.”
— Hahn and Sunstein

If politicians all agree on the need to take action, why has nothing worked? In sum:

  1. Congress continues to pass complex laws mandating more agency regulations.
  2. Regulators have no incentive to streamline or eliminate outdated, conflicting, or poorly written rules.
  3. Reforms typically layer on more reporting requirements, but stop short of setting quantitative goals for improving regulations.  

Argive is building a new approach to modernizing regulation using the power of open data and large-scale citizen feedback.  But sophisticated technology and data science alone cannot not solve the problem, we need government partners who are aligned to achieve positive regulatory outcomes. This timeline lays out the shortcomings of previous reform efforts to inform more effective policy strategies going forward.