Speaker 1: And we are back with another edition of the Federalist
Radio Hour. I'm Matt Kittle, Senior Elections correspondent at the Federalist,
and your experienced Shirpa on today's quest for Knowledge. As always,
you can email the show at radio at the Federalist
dot com, follow us on x at FDR LST, make
sure to subscribe wherever you download your podcast, and of
course to the premium version of our website as well.
Our guest today is Clyde Wayne Cruz of the Competitive
Enterprise Institute. He joins us to talk about the latest
ten thousand Commandments, the cost burden of the massive mountains
of federal regulations that each American American big businesses are facing. Clyde,
thank you so much for joining us in this edition
of the Federalist Radio Hour.
Speaker 2: You bet, I appreciate you having me. Thanks for thinking
of us and taking all this interest in the regulatory state.
Speaker 1: Oh, we're being buried by it every day. I don't think.
I don't think the average American knows just how much.
That's what the focus of this podcast today is really
all about. You write that Washington regulations got worse under
President Joe Biden, and I think we can understand that
having lived through it. Yes, because his administration sought to
impose progressive rules against energy, consumer appliances, labor, banking, online speech,
and other sectors of the economy. There's looking over the
previous four years, it would seem if it was moving,
as former President Ronald Reagan said, this administration was going
to try to tax it or regulate it. Is that
an over statement of the problem.
Speaker 2: No, you got it exactly right. I was you know,
I was noticing the other day. This is now thirty
two years that I've been putting this report together.
Speaker 1: And let me just say, wow, you've done this a while.
Speaker 2: Yes, I've been doing this a while. And you know
I took I got interested in this study in economics
at George Mason University, and you know, so many groups
in town focused on tax and budget. But I'm here
to tell you if you're missing the regulatory state, you're
missing the biggest part of what the of what the
federal government's intervention in the economy is. You might remember, well,
just just for framing this year, the federal government is
set to spend seven trillion dollars with a deficit of
two trillion dollars. Now that's a two trillion dollar deficit
without the excuse of COVID right, and no means place
so you you've already got a gargantuan federal regulatory state.
In that respect, we have been tabulating. And the way
to think of this, I do this report ten thousand
commandments surveying trends in federal regulations. That's environmental, health and safety, labor, paperwork, burdens,
all that sort of thing. And if you compare to
that seven trillion dollar federal budget, I use a placeholder
for the cost of regulation matter of two trillion dollars, well,
two point one point five to five. You know, obviously
it's not that exact. We're not economic planners. In fact,
you can't even say that we on the outside can
observe and determine what regulatory costs faced by others are.
But we can say two trillion is a good baseline
because I'm using older numbers from the federal government, which
is supposed to measure itself based on the regulatory right
to no act, but surprise, surprise, it doesn't. It's supposed
to tabulate then aggrega regulation, but it doesn't do it.
But since the nineties, there's been at least, you know,
close to a trillion that the federal government did admitted to.
I've compiled figures from various studies. There's a new NAM
National Association of Manufacturer study that puts that puts the
cost at three trillion. I'm comfortable using this two trillion
placeholder because what I'm trying to do is get Congress
to force agencies to own up to the cost of regulation,
but more than that, for Congress to take back that power,
because our real problem is over delegation. Congress disregards its
Article one powers of it's supposed to be the only
one making laws. Found our founder, Fred Smith would say,
the Constitution isn't perfect, but it's better than what we
have now in terms of regulation and the administrative state.
Congress has delegated so much of that power. And that's
what you were asking about Biden, and that's what set
Biden on his path to pursuing progressive regulatory ends and
climate equity, the care economy, all of these progressive pursuits
that kind of replace the original Constitution. But I'll just
say quick on that two trillion figure, it's equivalent to
the deficit as we touched on, but two trillion is
also what the individual income tax seats are now roughly,
and if you think of corporate tax receipts, those are
around five hundred billions, So regulatory costs four times what
the corporate income tax is. Corporate pre tax profits around
three and a half trillion, so regulatory costs are over
fifty percent of corporate pre tax profit. So it's a
huge amount of money. So putting this kind of in
the framework of what Biden did, well, what Trump tried
to do the first time, and what Biden did a
few years back. We were taking an interest in executive overreach,
which is a big, big concern of yours. And you
might remember Obama would say, I've got a pen, I've
got a phone. If Congress doesn't act, I'm going to
We're going to act without Congress. Oh yeah, yeahs change Obamacare.
Speaker 1: Elections have consequences. Whatever happened to the Democrats on that run, right.
Speaker 2: Yeah, they sure knew, and at that time, very much
contrast to now. I was, in fact, it was doing
a piece on this yesterday. The progressives are attacking Trump
over abuses of executive power. There's some areas where that's valid.
There's somewhere, I think where what Trump is trying to
do is reduce governmental power as such. And each of
his executive orders does have a disclaimer this applies to
the extent valid by law, and he's not being authoritarian
in that respect. But Obama seemed to be. He's got
that pen and phone, and he expanded the federal state.
He changed Obama Care's application to small business without you know,
with a press release, and his Department of Labor would
change the way that franchisees and independent contractors work. No law,
no notice in common rule, just a executive and administrative interpretation.
That's what those were called. So at that time, Matt
I started thinking, well, every year you've got about you've
got a few dozen laws from Congress. But at the
same time, you've got three thousand rules and regulations, and
I tabulate, I joke and call this the unconstitutionality index.
In ten thousand commandments, you've got this multiple of nineteen
laws nineteen regulations for every law, at least in terms
of pace. But more than that, Matt and Obama is
what really brought this to the four for me, and
by extension, now Joe Biden and now the potential Trump reversals.
But Obama was doing it notices, circulars, bulletins, guidance documents, interpretations,
policy statements, and I took to calling this stuff regulatory
dark matter, and we tried to do anory of it,
because if you've got a few dozen laws, three thousand
rules and regulations, you've got a lot more regulatory dark matter.
That's the big challenge. I would say for folks like
you who are interested in challenging the administrative state, the
big problem you've got on your hands now is even
if we crack down on notice and comment regulation, as
Trump is doing, I think he's doing some good things
in that respect, but so much of the regulatory state
is now laundered through regulatory dark matter. And of that
seven trillion that I mentioned to you, that is federal spending,
hundreds of billions of that is contracts, grants, grants, in aids, subsidies, procurement.
Federal government even under Trump, boast of being the largest
purchaser of goods and services on planet Earth. So you
can have a lot of regulation get laundered in So
if I had I would say, you know, I've been
doing this report a long time to say, if I
get one thing across to you in this is that
there's now a fusion of spending and regulation that the
liberty movement has to grapple with. That I don't think
it is quite done. But in terms of trying to
fix it, first, Trump administration the guideline, the kind of
the pedaltone. There was one end two out for regulations, right,
and that was base a cost freeze. And he also
within each of the departments and agencies he put in
place so called regulatory reform officers. Biden came in swept
all that aside on day one. He literally had a
memoranda on day one called modernizing Regulatory Review, by which
he meant not reviewing regulation. But he wiped out all
of the Trump streamlining agenda when he did that, and
he replaced it with what they called And you can
go back and find these these these these statements and
fact sheets and press releases from the Biden administration. But
he was pursuing, as I mentioned, those whole of government
campaigns on equity and climate and justice and net zero
and the care economy and long COVID, all of these
areas where there was a whole of government approach such
that you know, we would normally think, well, you block
environmental regulation at DEEPA or you labor. He he was.
He charged every agency with equity plans, justice plans, climate plans,
even pulled the so called the alleged independent agencies financial
agencies like the SEC, the Consumer Financial Production Bureau into
these gargantuan environmental concerns. It was a huge shift such
that if you get rid of one agency and its
authority on that progressive conceit doesn't change anything. It all
just gets picked up by some other agency. So in
prior editions of ten thousand commandments before this one, I
spent a good deal of time cataloging Biden's wholesale replacement
of the Trump streamlining, which was a very very interesting era.
So that Biden has had deleted all of that. Trump
has come back in and so far has done one
hundred and forty two executive orders. And I was looking
the other day, I was wondering how many were regulatory.
As I was saying about now the fusion of spending
and regulation, all of them are regulatory. But of the
one hundred and forty two executive orders there there were
over a dozen that were addressing regulation, and of those
about about six that directly invoke the Department of Government Efficiency.
The DOGE that Elon Musk heads up and that Vieback
Ramaswami used to be the co head of. And the
interesting thing about DOGE and this was just we're just
compiling this yesterday. You know that you got folks on
our side, you know, fighting about DOGE. Oh, this is
this is Bologne. Ah, this is going to do great things.
DOGE was set up to go away in a year.
It has to go away next year at America two fifty.
That's the charter that it has. It's the renamed US
Digital Service. And I was looking at comparing it to
comparing its reductions of workforce to what had been done
by Don Devine and his great book. In fact, I
had it right here, Reagan's Terrible Swift Sword by Don Devine,
who was Reagan's Officer Personnel Management Director, and DOGE is
kind of like the Swift but not so terrible Sword.
They've put together some great things in terms of reductions
of the federal state. Musk might have promised two trillion
back in October. We didn't get that, but we have
gotten around one hundred and fifty billion in reductions that
has claimed, oh, we.
Speaker 1: Need to be on that road. I mean, that's the
bottom line here that we're talking about. And I guess
with all of this and what you have been reporting
on for a long time, you know better than anybody
that the roots of the problem run very deep and
they're decades old. The Supreme Court has taken care of
some of this really opened the door to the end
of what had been long referred to and long drawn
out as the deferential state of things, deference deference to
these bureaucracies. In bureaucrats, you talk about Congress abdicating its
responsibilities under the Constitution, under the first branch responsibilities, that's
for sure, and that was assisted through you know, the
old Chevron case and all of these other cases that said, well,
let the let the experts, because they know this subject
matter better than anybody, We're going to defer to them.
And that's exactly what happened under Obama in particular, all
of the experts, and remember these same experts were the
ones who were telling us to follow the science and
violating every principle of science during COVID. So how do
we get to I know, as I mentioned the Supreme
Court decision. A couple of decisions have straightened that out
a bit. But how do we get to the point
where we're not we're no longer longer deferring to the
bureaucracy and giving the bureaucracy outsized power that has taken
place over decades in this country.
Speaker 2: Well, boy, I'm I'm glad you brought that up. The
Chevron deference had been the notion, you know, it started
back in the eighties, the notion that, well, the agencies
are the experts, so they've got the knowledge that Congress
doesn't have. And in fact, that's why Congress delegated the
power to the agency in the first place, because it
wanted these independent, rational, apolitical experts to make the decision.
And this goes back to early progressive era. Conceits is
what I often call them. And you know, to put
this in perspective too, our founder Fred Smith said, the
genius of those progressives was any when they got into power,
anything that was under government control, airsheds, watersheds, spectrum, especially
air spaces, anything that was in government hands that remained
there so they were able to latch on and claim
to be the expert allocations allocators of these resources and
claim that expertise. But I would say, here's what I
would say, you have to be careful about you know.
I put it this way. You can't just think up
a value and then name an agency after it and
think you're regulating and doing it, doing expert regulation because
often I think agency interventions and their silos, you know,
the you know the labor environment, UH, transportation, you know
their air space, energy, telecom. Regulating all of these entities
in the silos like we do often removes them from
the competitive marketplace and the competitive disciplines and from real expertise. Ideally,
even if agencies did have the experts, the expertise that
progresses and and you got to you got to acknowledge too.
Even John Roberts in the Chevron decision talked about agency expertise.
He said, you know where there's agency expertise that needs
to come in to play. But we're not just going
to let agencies interpret their own statutes. Even in the
legal environment, even in the judiciary, there's still this notion
that expertise is what agencies do. I think it's important
for our liberty movement in the same way I was
saying the big theme earlier is the fusion of spending
and regulation. I also have to challenge the notion that
the agencies are experts, because I mean, just just as
a for example, drones a new technology that came that
came upon the scene a few years back. Almost immediately
you had the FAA putting out four hundred page rules
governing drones, a brand new technology, and rather than taking
advantage of the new expertise in terms of geolocation and
so forth, I would joke that with the ability to
for geolocation and GPS and tracking, you could pack the
sky like a neutron star with drone quarters and property rights.
I'm really getting at property rights and you know, flying
over homes and may generating new rules for this new environment. Instead,
what the FAA does takes the entire drone industry, dumps
it into eighty year old airspace mechanisms that it governs,
and then it governs everything pilot certification, airworthiness, how high
your package has got to be before Amazon drops it off.
When we get to drone deliveries and things like that. That's
just one example that you know, flying taxis where the
expertise really comes from. In terms of energy conservation is
another one. If you've bought a gas can lately at
home depot or Walmart, it's got all these springs on it.
You gotta have you gotta have three hands to operate it.
Speaker 1: Yes, I hate those. Can we stop that? I mean,
if we can do one thing and ending regulation, can
we do that? My son and I were trying to
cut the lawn the other day. We couldn't get the
damn thing open. And I think so many Americans are
feeling the same frustration. But that is I think you
said it right there. That's a that's a great example
of the not just the over thing, yeah, but how
much control these bureaucrats have over the average American. And
the sick punchline to the joke is, as you note
here in your study, we are paying for that obsessive,
compulsive behavior on the part of the regulators. And once
they get their foot in the door, as it is
with all of these spending programs that we talk about
during the pandemic era that remain in place, that level
of spending remains in place, it is almost impossible, it seems,
to get rid of it. So how do we get
rid of it? These things that are impacting the everyday American.
Speaker 2: I wish I had this little It was an upside
down funnel of the Capitol Dome. Showed the easy stuff
that we can do, Matt versus the stuff that's harder.
And it's Congress is over delegation. That's the problem here.
But I would submit also that it's Congress's own disregard
of enumerated powers that we've got to grapple with as well.
Because you've brought up COVID a couple of times, and
I was doing a c SPAN interview the other day
and I mentioned what had struck me about that time
of COVID. And I've mentioned to you, as you said,
you know, the spending rockets up and then it stays
at that level. Well, now we have a two trillion
dollar deficit. Well, the first time that happened was during COVID.
And I was mentioning to the host that I remember
the signing of the CARES Act, the Coronavirus Response Act,
and Trump was signing it and he looks up at
Mitch McConnell and says, Mitch, this has got a t
on it. I've never signed anything this big. I'm not
sure I can sign this thing and we can't turn
back now, though, can we? And everybody nervously laughs in
the Oval Office as they're signing the CARES Act. But
then look what that led to. That led to It
had provisions in it like the viction moratory, and we
talk about Biden extending those kind of things, but Trump
did too. And you know, all of these interventions that
COVID set in place quickly, it was followed up on.
They often say there's gridlock in Congress. I'm here to
tell you there hasn't been any gridlock since COVID because
after that, then the American Rescue Plan came through, more spending,
then the Inflation Law, the Infrastructure Law, the Chips and
Science Act, So these gargantuan pieces of legislation that I
try to get across every chance I get, they were
already hyper regulatory before the administrators start writing the first
the first rule. So here I'm in this pickle. I've
been spending my career talking about over delegation and agencies
issuing too many rules, you know, three thousand a year,
and it all stacks up with no release. And later
we can talk about some solutions too. Because I'm not
a pessimist. I think there's some optimistic solutions, but you know,
you have these kinds of interventions. But Congress has got
to grapple with the fact and I think the Trump
administration and I think Doge too. Doge could lead at
least in terms of the public relations campaign. But you
talked about agency expertise. Congress has delegated that power and
created enabling statutes with these these regulators all across the
board in the economy. And it's only the only way
we can get rid of all of the rule writing
is actually the step back and get rid of the
agencies and get rid of the enabling statues that created them.
And the only ones we're hearing up so far are
Department of Education. You know, that's that's one where you know,
the new administrator said, you know, just like Alfred Kahan
back in the days of the Civil Aeronautics Board, you know,
my job will be done here. There's no job when
I leave it to leave the Department of Education. But
got to be very careful because like during the first
Trump administration, he had a reformatting of the executive branch project.
Mick Mulvaney headed it. At the end of that year
long project didn't eliminate any agencies. It just took some
of the Department of Labor programs and put them over
at the Department of Education. Or it could have been
the other way around, but it was one or the other.
And the point is no ending of the agencies. And
dogs can't do it all by itself. Dogs can help
shrink or deflate agencies, and they you know, sound like
a like a whoope cushion and they make the same
sound as you've been able to tell for the last
two months. Oags can deflate things, but you know, like
fat cells, it's still there. And if you get another
progressive administration in, they can expand. Now it is the
case that, for example, with the UH some of the
agencies that have been rolled out and put under the
Department of State under Rubio, there is some cutting going
on and there is some trimming of jobs as you know,
as Divine had done back in the Reagan administration. There
are cuts in that respect, but still has delegated these
powers to agencies or has created these bodies. And we
have to think about what regulation means because you know,
we're we're small old libertarian free market types and I
would when they say, well, what you don't want any regulation, wan,
I'm like, well, no, you you want regulation. But your
question is always is it going to be this political
regulation from agencies or do we want better competitive disciplines?
And I always favor the latter because I'd mentioned this
the other day. You have a company, but it's got
upstream suppliers, downstream business customers, consumers, Wall Street, the media, advertisers.
All of these forces are raided against companies that misbehave.
But on the regulatory side, they just say, you know,
set a floor. I always joke, you know, all tainted
meat and was approved by the USDA. I think it's
much better to have to elevate those competitive disciplines. And
it's especially important now into in new technologies like you know,
three printing, AI, cryptocurrency. We have to develop. The job
of the free market isn't just to create the new
product or service, but also to develop the disciplines and
the risk management institutions that go along, you know, everything
from warranties and contracts and so forth, to protect the public.
And I don't think you can replace that kind of
that kind of discipline and that kind of regulation with
just by creating an agency.
Speaker 3: It turns out in Congress we have a uniparty. The
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Speaker 1: I think you raised I think you raise a very
good point. I think it's also what we have seen
over the last several years in this country is the
government working alongside some entities in the private sector, and
the private sector being compliant with the administration, with the
regime in power to censor Americans, a sensor speech to
you know, do things that harm the individual rights of
Americans where you have so, Yes, regulation is still very important.
I don't want to get away from that, but I
think we're at the core What we're really trying to
get at is the absolute over regulation in the lives
of average Americans. And I want to talk in specifics
about what we're seeing, what your your report finds here
when we're talking about two trillion dollars or so that's
costing the average American, I believe somewhere in the vicinity
of sixteen thousand dollars a year in overregulation. Our guest
today is Clyde Wayne Cruz of the Competitive Enterprise Institute,
on his latest report, ten thousand Commandments the cost Burden
of federal regulations. You mentioned it's everywhere energy, consumer appliances
that grabbed a lot of headlines continues to this day.
You know, vehicles that we drive, the climate change cult
that is out there, labor, banking, online speech, other sectors
of the economy. What are some of the more egregious
abuses of overregulation in this country?
Speaker 2: Yeah, I think to me some of the you know,
I mentioned kind of the jokey example of the gas can,
but it's not really joke because if they can't get
something that simple correct, it's hard to get hard to
imagine they're getting getting other things correct. Course of trying
to get rid of the of fossil fuel use and
automobiles and shift everybody toward toward electric cars. It's one
of the tremendous ones. And you can see what's really
on some legislator's mind, at least in terms of what
they are getting rid of from the Biden administration. I
had put together a chart of all the major rules
under Biden, and they shot way up under him, and
it's largely energy and environment and so forth like that.
But under the new Trump administration, they're able to use
what's called the Congressional Review Act passed in the late
late in the last century. Up until Trump, it had
only gotten the Congression Review Act had only repealed one rule,
and that was on repetitive motion injuries. And under the
first Trump administration several more were repealed, and so now
they've been about twenty. But we're talking about out of
over three thousand rules and regulations that come through, but
recent ones that were repealed. There was there was a
methane flow rule, methane fee rule, some of the tailpipe
admission rules that were just overturned in the new administration
by sign a resolution by both houses of Congress and
then signed by Trump and the tailpipe rules and so forth.
And some of the most annoying ones have been the
energy conservation rules for dishwashers and appliances and washing machines,
you know, the front loading washing machines that mold up
and don't clean. All of those have been have been
a real headache for the public, and there have been
some rollbacks on those in the new administration too. But
you know, it's in some ways that things are frustrating
because it is the case that of Biden's many major
rules last year and significant rules and regulations, it's you know,
dozens of them were potentially able to be overturned, but
you end up with just a few. And so that's
one of the reasons I say, you you know, in
terms of restoring liberty, restoring normal normalcy and government governance
and Article I authorities for Congress, while Congress also adheres
to its own enumerated powers and doesn't do all the
things that's been doing since COVID, but you know, restricting
the power of government as such matters a lot and
a lot of that has to recognize that, you know,
most of our wealth isn't created yet, most of our
jobs aren't created yet, most of our industries aren't created yet,
and we don't want to have this pre existing administrative
state with all of these alphabet soup bodies in place
to capture or to pre capture all of these new
sectors before they come into being. We don't have to
regulate in the future the way we've done in the past,
and we can actually do it a lot better, as
as I mentioned earlier, with the right kinds of discipline.
So I wish we could get across Matt to the
to the members of Congress. They just can't poke around with,
you know, reviewing rules a little better or saying they're
going to do cost benefit They've really got to go
after these administrative agencies as such and dismantle them.
Speaker 1: Well, whatever happened to the Rains Act?
Speaker 2: Oh, oh, you know what. I'm glad you brought that up,
because there's like a there's a series of regulatory reforms
right that are useful, you know, just better report cards,
better cost benefit analysis, regulatory reduction commission, sunsetting, all sorts
of things like that. The Rains Act, which stands for
regulations from the Executive in need of scrutiny, would have
would require or allow Congress when there's a major rule
coming through that in order for that major rule to
become effective, Congress would have to approve it, okay. So
in other words, if an agency issue is a rule,
Congress doesn't approve it, nothing happens. The rule doesn't go
into effect as it is now under the Congressional Review
Act that I'd mentioned a little bit ago, where they're
just barely over twenty rules have been stopped under the
Congressional Review Act, and agency issue is a major rule,
Congress has got to get upon its hind legs and
you know, do a resolution of disapproval in order to
get rid of that rule. And of course that doesn't
happen very much. So that's why the Rains Act. It
actually had a better name back in the late nineties,
and it's passed the House a few times, never passed
the Senate. The original name was the Congressional Responsibility Act,
which gets to what you and I are talking about
about Article onepower in this and it really being Congress's
job to make the laws and to be responsible for them.
Speaker 1: Now, why why do they get rid of that name?
Speaker 2: Pray tell you know, I don't know. It went through
It went through a few phases. But way back then
it was JD. Hayworth in the Congress, Arizona Congressman who
who it intridues it. I remember back in the day,
you know, participating in a press conference supporting it. And
over time it went through a few iterations. It would
get different co sponsors and so forth, and now kat
Hamick in the House, Ran Paul and the Senate are
the sponsors of it. And it just so happens there's
a version of the Rains Act, which you know, as
we say major rules, Congress have to approve them otherwise
they're noel and void. But there's a version of the
Rains Act that's now being invoked in the in the
debates now over the budget reconciliation, you know, the h
this budget where we're spending seven trillion. Well in terms
of finalizing the budget, you know, for the for the
current fiscal year, there's there's an opportunity to do a
reconciliation which can't be filibustered. There's an effort underway and
it has kind of behind the scenes, has been working
with the Senate also to get a portion, not not
the entire Rains Act, but elements of the Rains Act
into the Budget Reconciliation and there's been a markup of
that in the House Judiciary. Other committees are doing their
markups as well, so we'll see what they finally get
together and what goes to the Senate. But I say
it facetiously.
Speaker 1: Of course, I'm yes with full timegras shake whatever happened
to the Congressional Responsibility Act, because as we have noted, clearly,
Congress does not want to take responsibility. And I hate
to hammer on that, but I think it's so necessary.
That's when you're talking about recommendations on how to carve
up this two trillion dollars that we're talking about in
over regulation, and that could be a conservative estimate. As
you noted, the only way that you're truly going to
start doing that is to get Congress to do its job.
Rain's Act is.
Speaker 2: Part of that.
Speaker 1: But how do we ultimately get there to the benefit
of the American people.
Speaker 2: I think it'll have to be There is a chance
that the Rains Act could make it through the sentiment
Senate Parliamentarian. I'm skeptical. I think that budget rules might
prevent it. I hope that it will, because if Wayne
is the parliamentarian. Then I say that any thing that
any regulatory policy affects the federal budget in terms of outlays.
Speaker 1: Are you suggesting are you suggesting the United States of Wayne?
Speaker 2: Perhaps? Yeah, you know, all these authoritarians running around like
we but yeah, so what the problem is there is
a there's a call for saying that, well, if we,
if we, if we try to get the Rains Act
into the budget reconciliation, it's got to meet budget rules.
And in order for it to meet budget rules, regulations
have to directly affect the federal budget. So that is
said to not apply to regulations. So so generally items
like Rains and others have not gone through on budget
reconciliations before. They're trying to make the case now that
it can. Now I would say, you know, when I
was making that joke about you know the Wayne is parliamentarian,
regulatory costs are such a big factor in the economy
that any change in regulatory policy that alters business profitability
and economic growth and productivity automatically affects federal revenues. But
that's considered I think that's direct, but that's considered an
indirect effect. So in order to get through the Parliamentarian.
There's going to have to be a ruling that the
Rains Act in the provisions it has with respect to
regulations that raise government revenue are relevant and direct effects
on the budget. So it's not clear that we get through.
There might be other kinds of regulatory reforms, like say
regulatory cost budgeting, some limited version of that that could
get through on reconciliation, but it's going to be a
heated battle. Interestingly enough, when the reconciliation was marked up
in the Judiciary Committee the other day, there wasn't a
whole lot of debate about this RAINS provisions. I think
there's just expectation that barriers will be thrown up in
the Senate. But interestingly enough, there were provisions in there
on sunsetting of rules that seem to have made it through.
And also, you know, we talk about this aggregate estimate.
I say two trillion, NAM says three trillion. I think
it's even a lot more than that. But you know,
there is a provision in the new Judiciary markup that
would require the GOEO, the Government Accountability Office, to perform
an aggregate estimate of regulatory costs. At long last, it's
already supposed to be done because owing to the Regulatory
Right to Know Act from in the late nineties. But
it's not done. You know how that works. They just
ignore the law. But interestingly enough, there is a provision
for GOEO or do it. And I would love for
somebody to come along and do that. I could quit
writing this report every year.
Speaker 1: Yes, indeed, yourself put yourself out of work right, as
we talked about before. But that's an important point here
that we haven't discussed, and that is there are a
lot of people, a lot of lobbyists in particular, making
a lot of money out of the current system, out
of the changes, the constant changes the rules. There are
the lobbyists, the attorneys that are making money simply because
it takes an army of attorneys to be able to
understand what the hell is going on out there, uh,
and how it's going to impact our annual business, our sales,
you know, distribution change, all of this sort of stuff.
Speaker 2: Uh.
Speaker 1: There is money to be had from industries that you
know are going to make some money from from massive changes.
It always plays out. So with so much money at stake,
money is the driver for everything. How do you get
real reform.
Speaker 2: You know, you you asked the same thing a little
bit indirectly with range. You know, how do you get
it through. It's a real problem, and it might even
be worse than you think, because when I when I
said that about spending and regulation and the fusion kind
of this grand unification of spending and regulation, there's also
a parallel fusion of business and government that you're kind
of getting at there. I was, I was joking. I
joke a lot of times now that you know, in
the wake of COVID and all these the infrastructure law
and the inflation law, and all this government money, federal
money being poured down to the states and localities and
out to businesses that everything from local tap water to
space commercialization as a business government partnership rather than free
enterprise capitalism like I wanted to be. So it's extremely
tough and even we'll put it this way, Matt, the
last time we had major regulatory reforms, like you're talking about,
what does it take to make this happen? Which is
what I'm spending all my time on. The last time
we had major reforms was the mid nineteen nineties and
a little later than that when we had the Small
Business Regulatory Relief Act, the Unfunded Mandates Act, the CRA,
the Congressional Review Act, we were just talking about the
Regulatory Right to Know Act that we just talked about.
All of those happened within just a few years of
each other, and interestingly enough, it was under Clinton, a
Democrat rather than a Republican. That's also when we did
welfare reform and had the last time we had a
budget surplus was under Clinton. But the difference back then
is you had state and local government and small businesses
all coming to Washington complaining about red tape and urging
for the cutting of burdens. And we don't quite have
that anymore. If you noticed it, I noticed this. It
was a little bit shocking to me, and I ended
up writing writing a piece in Forms about it. But
I was watching like the mayors coming to Washington and
having Kamala Harris and Joe Biden appear at their conferences,
and everything they were talking about is all of the
great things they were doing with all the federal money
being poured down to them, you know, for retrofitting school
buses and buildings to make them energy efficient so called,
and expanding government programs and government environmental projects and so forth.
The federal government. The federal government is now so big
and spending so much that it's pouring money in to
even unfortunately even a little bit under Trump, because they
were just announcing how great it is that they're doing
more small business loans than ever. I don't think that's
so great. I want healthy banks and healthy small businesses
to be doing the lending, not the lending being driven
by the federal government. So we've got this problem that
our founder Fred Smith called the government steering while the
market is just rowing. And that heavy spending that's also regulatory,
is leading to too much of a fusion between business
and government. And by extension, you know, you're the federalist.
The big problem we have with federalism is not just
you know, the division you know among you know, the
federal type of government where you have you know, the
federal the state and localities doing their thing. The state
and local governments are now getting Even before COVID, they
were getting over seven hundred billion in grants in aid
from the federal government for transportation, environment, labor, welfare. All
of these programs were being funded by the federal government
rather than just leaving that money in the states in
the first place. And so if the federal government is
running those programs, and this is this is all the
backlash you see to Trump. Now the states and localities
are complaining about losing their federal money. Well, why are
they getting federal money? Why isn't it just already in
the states. So when you have that kind of a
rather than federalism, you have this this this entanglement between
the states and local governments and the federal government makes
it very hard to to wall things off and block things.
So it's a real debate. It's not it's really a problem.
It's not like you know, a generation ago when the
state and local government was complaining about Washington. Now they
want they just want more to run these programs. And
you know, if we if the election goes another way
in a couple of years and you get progressives back
in power, this bigots just opened back up. That's why
I would say one thing I wish too, you know,
in terms of your your concerned about how do we
make this happen. When Trump is talking about small business
loans and increasing those and when he's talking about you know, uh,
the you know, the education programs and the states and
localities doing what the federal government says in order to
get their money. I wish that there were a project
in the White House to say, rather than tweak these
programs so that you're doing a little bit better in
terms of managing them. Instead, instead we get a retrenchment.
We reposition all of these social functions and economic functions
back in the states where they belong. Instead, we're expecting
the federal government to do it all. So that that's
kind of what I mean about the you know, the
fusion of spending and regulation, and it's not just affecting
business and consumers, but it's incorporating and embedding, you know,
the federal government into everything that states and localities do.
And so the constituency that you would have for deregulation
and cutting spending is bought off in a way.
Speaker 1: That is well, the ultimate problem is, to put it
in the parlance of Rambo a long time ago, we
are on a drunken boat driven by and we had
the previous four years been driven by a drunken steerer.
You talk about the steering of that boat. That's I mean,
we're in the left in this country has pushed so
many programs, and it truly is driving and has driven
through our tax payer dollars, a system where the federal
government will take care of you or that's their idea
from cradle to grave. That they like to talk about sustainability,
that is not sustainable. So some of these changes, and
really I think some very significant and good changes going
on in this administration. One of the things that I
think we've been talking about all along is congressional responsibility.
It can't just be executive order because that is certainly
subject to change. It has to be codified. That's what
has to be the next level. And that's you know,
perhaps an extended conversation for a different time. But I
want to thank you very much for joining us and
and the work that you've done over these past what
thirty two years. I appreciate I.
Speaker 2: Can't thank you enough for having me. I really appreciate it.
I appreciate your interest in this and I think you know,
you know, not to leave it on a negative note.
I was talking about all this growth, but I do think,
I really do think you know, most of the world's
wealth isn't created. We have the opportunity if we do
a little bit of change in framing in the Trump
administration in terms of what it takes to actually shrink
the state, not just the administrative part of the state,
but all of it and return things back to civil
society and start to try to roll things back. I
think we can do that in Free the future, you know,
since I say, you don't have to tell the grass
to grow, you just need to take the rocks off
of it. And that's what we have to do.
Speaker 1: There you go, and thanks to my guest today, Clyde
Wayne Cruz of the Competitive Enterprise Institute, on the latest
ten thousand Commandments the cost burden of federal regulations. You've
been listening to another edition of the Federalist Radio Hour.
I'm Matt Kittle, Senior Elections correspondent at the Federalist. We'll
be back soon with more. Until then, stay lovers of
freedom and anxious for the frame.
Speaker 2: Heard the fame Boy Serison and then it faded away.