Giving Congress More Power over Federal Regulations

America’s economic freedom ranking has taken a tumble in recent years, with the Heritage Foundation-Wall Street Journal freedom index placing the United States in twelfth place for economic freedom. The drop is not an aberration — for the last seven years, the United States’ economic freedom score has fallen in the Heritage-WSJ index, making it the only country to hold such a distinction.

Ahead of the United States in the rankings is Hong Kong (in first place), followed by Singapore, Australia, Switzerland, New Zealand, Canada, Chile, Mauritius, Ireland, Denmark and Estonia.

What’s responsible for the drop? Charles Calomiris, an adjunct fellow at the Manhattan Institute, boils it down to one major problem: the growth of power exercised by administrative agencies. It is federal agencies, from the EPA to the Consumer Financial Protection Bureau, that enact regulations — based on congressional legislation — that ultimately impact individuals and businesses.

Many people may not realize that Congress has power to limit this regulatory action, notes Calomiris – the 1996 Congressional Review Act allows Congress to disapprove federal regulations. But despite 47,540 federal rules passed from 1996 to May 2008, Calomiris reports that only 47 disapproval resolutions were even introduced in the House and Senate. And James Gattuso of the Heritage Foundation reports that the CRA has actually stopped an agency rule from taking effect only once.

Senator Rand Paul (R-Kty.) has introduced the REINS Act (short for “Regulations from the Executive in Need of Scrutiny”) in order to give Congress more power over federal regulations. Rather than requiring a vote of Congressional disapproval in order to invalidate agency rulemaking (as is the process under the Congressional Review Act), the REINS Act would require Congress to approve, via a vote, all proposed “major” regulations. Major regulations are those with a $100 million annual impact on the economy.

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