March 21, 2017

Every day, the U.S. regulatory apparatus collects new regulations, proclamations, issuances, memoranda, etc., that add up to a tremendous burden on market activity and civil society. A new study from the Competitive Enterprise Institute (CEI), an Atlas Network partner based in Washington, D.C., aims to measure the extent of this “regulatory dark matter” by taking an inventory of exactly what kinds of regulation accumulate through government action at every level of the federal government, the detrimental effects on society, and prospects for substantial reform. The study has received significant coverage from both Forbes and Fortune magazines.

“It has long been the case that there are far more regulations than laws,” writes Clyde Wayne Crews Jr., CEI’s vice president for policy, in the study. “That is troublesome enough. But with tens of thousands of agency proclamations annually, agencies may articulate interpretations and pressure regulated parties to comply without an actual formal regulation or understanding of costs, generally with judicial deference to what agencies contend, an issue of increasing concern to Congress. The result is that no one knows how much the regulatory state ‘weighs,’ or even the number of agencies.”

Only a tiny percentage of the observable universe, less than 5 percent, is made up of visible matter like stars and planets, Crews points out, and the pervasive dark matter that constitutes the rest is much like the unseen mass of regulatory policy rulemaking that lurks behind the small percentage of laws and policies that we can easily track through publications like the federal register.

“Many binding rules come from agencies rather than elected lawmakers,” Crews explains. “Federal departments, agencies, and commissions issued 3,853 rules in 2016, while Congress passed and the president signed 214 bills into law—a ratio of 18 rules for every law. The average has been 27 rules for every law over the past decade ... The rules issued in a given year are typically not substantively related to the current year’s laws, since agency output represents ongoing implementation of earlier legislation. Looking back, there have been 88,899 rules since 1995. Another 2,419 proposed rules were in play at year-end 2016.”

The CEI study can undertake only a partial inventory of this “regulatory dark matter,” because “agency memoranda, guidance documents, bulletins, and other dark matter are more difficult to broadly grasp and measure. And there is a lot of it.” It’s harder still to measure the compliance costs.

“Oversight matters,” Crews continues. “The number of notices, Federal Register pages, and final rules dropped significantly following President Reagan’s EO 12291, before starting to rise again. The ‘other’ documents category in the Federal Register—which included these notices plus presidential documents—had been as high as 33,670 in 1980. During the late 1980s, the tally hovered at a considerably lower 22,000 annually. Since 1976, there have been well over 1 million ‘other’ documents or notices. But at this point there is no coordinated congressional or executive branch effort to identify the regulatory dark matter embedded within the thousands of agency notices. Such an assessment is needed.”

In order to foster substantial reform, Crews argues, Congress must punish bureaucratic officials who engage in arbitrary rulemaking, mandate full disclosure for all agency decrees rather than only officially codified rules, mandate notice and comment procedures for agency guidance, and require a vote of Congress for approval of costly or controversial bureaucratic decrees.

“Regulation and guidance cannot be controlled without downsizing the federal government itself and strengthening democratic accountability,” Crews concludes. “That requires reining in the colossal bureaucracies that enable rule by unelected experts (so professed). Ending regulation by guidance is especially urgent to rein in agency efforts to regulate new technologies, business models, and contractual arrangements using obsolete, decades-old rules—via guidance and without congressional authorization. If government oversight is warranted in one of these areas, Congress should legislate directly, rather than allow for open-ended agency regulation.”