U.S. Congress concerned about excessive cost of regulation

In 1997, Rep. Sue Kelly (R-N.Y.) introduced a bill to create an independent agency in the U.S.A. to review regulatory rules for the legislative branch of government. That didn't fly. But Congress did pass the Truth in Regulating Act, which places authority in the General Accounting Office (GAO) to evaluate the calculations that federal regulators use to estimate the cost of major new rules. The bill is expected to be signed into law.

The GAO would be directed to evaluate economically significant rules - those estimated to cost more than $100 million to implement.

After a major rule is proposed, the GAO would check to see how the cost-benefit analysis was done and evaluate the agency's data, methodology and assumptions.

Under a three-year pilot program, the GAO would have 180 days to complete its report on each rule and send it to Congress.

Some members of Congress have been alarmed that some big- ticket items come through what they refer to as "back- door" regulating.

Potentially, Congress could ask for evaluation of any one of the 100 or so major rules that are issued annually - and an additional 200 or so that might affect small businesses.

Congress voted itself authority to stop final rules in 1996. And the GAO analysis might allow members to use the provisions of the Congressional Review Act to stop final rules.

Source: Cindy Skrzycki, Evaluating the Cost of New Regulations,Washington Post, October 17, 2000.

For more on Congressional Reforms http://www.ncpa.org/pd/regulat/reg-8.html

RSA Comment:
A wealthy country like American is showing concern over the cost of regulations imposed on its economy – a relatively poor country like South Africa should be even more concerned. Regulations are passed in South Africa without any consideration for the cost and in many cases the cost must far exceed the intended benefits. GDP per capita is not improved by increasingly costly bureaucracy – growth comes from a vibrant and efficient private sector operating in a low-cost and properly functioning law-and-order environment. Every unnecessary rand of cost that is added to the burden carried by the private sector is a rand less towards savings, economic growth and improved living standards for all citizens. The South African parliament should require the civil service to provide cost benefit analyses for all proposed regulations before giving its approval for their promulgation.

Eustace Davie, Director, FMF.