Accounting for the True Cost of Regulation: Exploring the Possibility of a Regulatory Budget

June 23, 2015

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Testimony before the United States Senate Committee on the Budget and the Senate Committee on Homeland Security and Government Affairs' hearing on Accounting for the True Cost of Regulation: Exploring the Possibility of a Regulatory Budget


Introduction

Chairman Johnson, Chairman Enzi, Ranking Member Carper, Ranking Member Sanders, and distinguished members of the Committee, thank you for inviting me to testify at this joint hearing on “Accounting for the True Cost of Regulation: Exploring the Possibility of a Regulatory Budget.” I am Director of the George Washington University Regulatory Studies Center, and Distinguished Professor of Practice in the Trachtenberg School of Public Policy and Public Administration.1 From April 2007 to January 2009, I oversaw executive branch regulations of the federal government as Administrator of the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB).

I appreciate the Committees’ interest in exploring the possibility of a regulatory budget. Taxes, and subsequent spending, are one way the federal government redirects resources from the private sector to accomplish public goals. Regulation of private entities—businesses, workers, and consumers—is another. Like the programs supported by taxes, regulations provide benefits to Americans. However, the costs associated with regulatory programs are not subject to the same checks and balances.

As an OECD paper observes, “while governments are required to account in detail for their fiscal spending, regulatory costs or ‘expenditures’ are still largely hidden and there is still no accountability for the total amount of regulatory expenditure which a government requires.”