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How Best to Rein in the Regulatory State

FreedomWorks Foundation's Regulatory Action Center (RAC) submitted formal comments to the Office of Management and Budget (OMB) on their recent request for information. This request for information sought material on how best to rein in the regulatory state and how to make the adjudication and enforcement of federal regulations more fair for land-owners and businesses. RAC sought to answer questions posed by OMB to rein in out-of-control administrative agencies. That comment can be found in the attached file and excerpted below:

In his book Bureaucracy: What Government Does and How They Do It, Professor James Q. Wilson presents what is widely considered one of the best in-depth analyses of the nature of bureaucracy. Throughout, he applies many of the principles of public choice theory to understand the ways in which incentive structures impact bureaucratic performance in pursuit of their statutorily defined goals. He points out that government agencies cannot be examined in the same way as private firms because they are fundamentally different. Private firms are responsive to the market. Government agencies are only responsible to their overseer -- and sometimes not even then as in the case of the Consumer Financial Protection Bureau.

As Wilson put it, “putting people first is hard to do in a government that, ultimately, has the power to command people and even to send them to prison. A business may put people first because businesses compete with each other in order to attract customers, but the government competes with nobody. And cutting red tape may be possible in a business firm that can tell whether it is doing a good job by looking at its sales and profits, but cutting it in a government agency is much harder because (ordinarily) government agencies deal with neither sales nor profit.”

The monopoly governments have on the “power to command people,” often referred to as the power of coercion, is what makes the issue of enforcement and adjudication so important. The Office of Management and Budget accurately described in their notice that “The growth of administrative enforcement and adjudication over the last several decades has not always been accompanied by commensurate growth of protections to ensure just and reasonable process.” We would take this one step further to say that the expansion of the administrative state has practically never been matched with the requisite protections of civil liberties. As such, we applaud the administration’s efforts to begin the much needed review of administrative enforcement and adjudication. It is our hope that this request for information is only the first step in a long road to reform.