Wisconsin found the antidote to the disease of over-regulation

Under the leadership of Republican Gov. Scott Walker, Wisconsin has taken the lead in giving power back to the people, by limiting the size of government, thereby increasing personal freedom and improving the state’s economic future.

Walker’s most recent achievement is the Regulations from the Executive in Need of Scrutiny (REINS) Act, which he’s said he will sign soon. It prevents executive branch regulatory agencies — those under the governor’s control — from imposing significant rules without the consent of the state legislature.

{mosads}Upon passage of the legislation, Tom Evanson, a spokesman for Walker, said, “Gov. Walker thanks the legislature for sharing his commitment to bold regulatory reform and looks forward to signing the bill into law.”

It’s truly rare for a state executive to push for a law limiting his or her own discretionary power, but with REINS, that’s exactly what Walker did. By adopting the REINS Act, Wisconsin will become the first state to require “major regulations” — defined as any regulation imposing more than $10 million in implementation or compliance costs on the economy in a two-year period — to be approved by the state legislature and agreed to by the governor before it takes effect.

To ensure regulators give careful consideration to the potential economic costs proposed rules could impose on the economy, Wisconsin’s REINS Act will give the state legislature’s Joint Committee for Review of Administrative Rules (JCRAR) power to request an independent economic impact analysis of a proposed rule. And to guarantee regulators allow the public a greater role in their decision-making process, REINS will permit the joint committee to request public hearings on a proposed rule early in the rules-making process, giving all parties potentially affected by a proposed rule time and a public forum to voice any concerns they might have.

The Wisconsin REINS Act will also improve oversight and increase transparency and accountability in the rules-making process, putting the authority and responsibility for any expensive new regulations in the laps of elected legislators, where it belongs, rather than in the hands of unelected, largely unaccountable bureaucrats.

Besides accountability and transparency, another reason other states should pass their own REINS Act is that the massive number of government rules and regulations that have been passed by states across the country now cost consumers trillions of dollars every year.

Scott Manley, senior vice president for government relations at the Wisconsin Manufacturers and Commerce association, recently noted consumers don’t realize how much of what they pay for goods and services is due to government mandates, because they rarely directly pay the costs imposed by regulations. 

According to Manley, regulatory costs top $1.9 trillion annually, amounting to $14,842 per U.S. household. That’s nearly $15,000 unavailable to pay for health insurance, medicine or medical bills, college expenses, groceries, a new car or vacations.

Businesses are hurt by the regulations as well. The average U.S. business spends $9,991 per employee each year to comply with regulations. For small businesses with fewer than 50 employees, the total exceeds $11,724 per worker. A National Association of Manufacturers study found manufacturers pay on average $19,564 per employee each year for federal regulations. Small manufacturers are hit particularly hard, facing the equivalent of $34,671 in federal regulatory costs for each employee.

The REINS Act is an antidote to the disease of over-regulation, which currently ails many states’ economies. While some regulations protect human health or the environment, many provide no or minimal measurable benefits. Rules are often designed to expand the budgets and power of bureaucrats, becoming “make work” so bureaucrats are guaranteed lifetime employment.

Unfortunately, state legislators have all too often found it easy to delegate lawmaking to executive agencies. Legislators are credited for passing vague, feel-good laws, leaving the hard details of writing the rules and enforcing the laws to administrative agencies. When agencies go overboard, state legislators typically wash their hands of the affair, blaming the agency for going beyond what lawmakers say they intended, but then they do nothing to reverse the objectionable rule.

Wisconsin has shown the way. It’s time for legislators in other states to follow suit and take responsibility for the lost freedom, limited choices and high costs that result from the regulations flowing from the laws they’ve passed. Implementing a state REINS Act won’t on its own cure everything ailing various state governments, but it’s a good place to start.

H. Sterling Burnett, Ph.D., is a research fellow on energy and the environment at The Heartland Institute, a nonpartisan, nonprofit research center headquartered in Arlington Heights, Illinois.