Regulatory 'Pay-Go': Rationing the Public Interest

15 Pages Posted: 22 Mar 2016

See all articles by Sidney A. Shapiro

Sidney A. Shapiro

Wake Forest University School of Law

Richard W. Murphy

Texas Tech University School of Law

James Goodwin

Center for Progressive Reform

Date Written: October 2012

Abstract

Attacks on regulation have become commonplace in Washington, D.C., and on the campaign trail. Regulatory opponents in Congress have sought to translate their attacks on regulation into legislative proposals that, if enacted, would subvert the process by which regulatory agencies carry out their statutory mission of developing and implementing rules.

One of these anti-regulatory proposals, “regulatory pay-go,” embraced by Republican presidential nominee Mitt Romney, relies on a gimmick: It would prohibit agencies from issuing new rules, no matter how beneficial they are, unless they first identify and eliminate an existing rule that involves greater or equal costs for industry. Regulatory pay-go thus creates an overall regulatory “budget,” and by placing an arbitrary cap on new safeguards, it seeks to keep that budget of total regulatory costs from growing, without regard to the hazards from which those regulations protect Americans.

This CPR Issue Alert examines regulatory pay-go in greater detail, finding that it would further undermine the U.S. regulatory system’s capacity to protect people and the environment while doing nothing to improve the economy. The proposal is based on a dogmatic assumption that social benefits from regulation cannot possibly justify any increase in overall regulatory costs. Supporters of regulatory pay-go have not and cannot provide empirical support for this categorical assumption that ignores a long history of regulations saving lives, preventing injuries, and protecting property and the environment. Among its many implementation problems, regulatory pay-go would operate as a one-way ratchet, gradually reducing safeguards over time, and it would add to the already massive procedural obstacles agencies must overcome to continue protecting people and the environment against new and emerging threats. If adopted as an executive order, it would be illegal. If adopted as legislation, it would create a litigation nightmare.

Keywords: Regulation, Environment, Health, Safety, Government, Economics

JEL Classification: H11, H41, K23, K32, L50, L51

Suggested Citation

Shapiro, Sidney A. and Murphy, Richard Wyman and Goodwin, James, Regulatory 'Pay-Go': Rationing the Public Interest (October 2012). Available at SSRN: https://ssrn.com/abstract=2752702 or http://dx.doi.org/10.2139/ssrn.2752702

Sidney A. Shapiro

Wake Forest University School of Law ( email )

P.O. Box 7206
Winston-Salem, NC 27109
United States
336-758-5430 (Phone)

Richard Wyman Murphy

Texas Tech University School of Law ( email )

1802 Hartford
Lubbock, TX 79409
United States
806-742-3990 ex.320 (Phone)

James Goodwin (Contact Author)

Center for Progressive Reform ( email )

455 Massachusetts Ave., NW, #150-513
Washington, DC 20001
United States

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