Ripon Forum December 2015

December 2015Volume 49, No. 4

The fight to cut government red tape and restore common sense to the lawWith essays by Majority Leader Kevin McCarthy, Governor Dennis Daugaard,

Philip K. Howard, Clyde Wayne Crews Jr. & others

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Taming theREGULATORY BEAST

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Volume 49, Number 4

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Publisher The Ripon Society

President Jim Conzelman

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Billy Pitts Pamela Sederholm

Judy Van RestJim Murtha

Editor Louis M. Zickar

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© Copyright 2015 By The Ripon Society All Rights Reserved

“Ideas that matter,since 1965.“

Politics and Perspective

4 Congress, Heal Thyself By Robert Livingston 6 MakingOurAutoSafetyLawsWorkBetter By Michael Burgess

8 The FCC: Obama’s Broadband Bully By Brent Skorup

10 Q&A with Mike Oxley about the career of John Boehner

Cover Story

14 Regulatory Reform That Restores Government Of, By, and For the People By Kevin McCarthy According to the House Majority Leader, fixingtheadministrativestateisaboutmuch more than economics. It is about holding governmentaccountable

16 How Congress Can Fix Broken Government By Philip K. Howard With the regulatory state growing out of control, it is time for Congress to reclaim itsauthoritytoregularlyupdateexisting legal frameworks.

18 Pen and Phone… Meet Liberty’s Meat Axe By Clyde Wayne Crews Jr. Regulations cost some $1.8 trillion per year. By being AWOL in addressing this “hidden tax,”policymakersaremissinggovernment’s greatest impact on the economy.

Cover Story (cont’d)

20 HowCuttingRedTapehasHelpedFuel South Dakota’s Economic Success By Dennis Daugaard TheGovernorofSouthDakotadiscussesthe effortheisleadingtopeelbackregulations--an effortthathashelpedcreateoneofthetop businessclimatesintheU.S.

22 The Cost of Overregulation: America’s Small Business Owners Speak The owners of four small businesses in the UnitedStatessharetheirstoriesabout governmentredtapeandhowitisimpacting theirlivelihoods.

25 Fighting Government Red Tape: What the Next President Might Do By David Hebert When it comes to reining in the regulatory state,therearearekeydifferencesaboutthe 2016 presidential candidates that could be a factorintheelectionnextyear.

News & Events

29 Portman Pushes for Tax Reform - InremarkstoTheRiponSociety,theOhio Senatorsaysthecurrentcodeishurting American workers and squeezing the middle class Sections

3 In this Edition

32 Ripon Profile - U.S.Rep.CarlosCurbelo

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In this EditionTHE RIPON SOCIETYHONORARY CONGRESSIONAL ADVISORY BOARD

U.S. Senators:Shelley Moore Capito - Senate Co-ChairCory Gardner - Senate Co-Chair

Roy BluntRichard BurrBill Cassidy, M.D.Susan M. CollinsJoni ErnstDeb FischerOrrin G. HatchPat RobertsThom TillisRoger Wicker

U.S. Representatives:Pat Tiberi - House Co-ChairRenee Ellmers - House Co-ChairMartha Roby - Vice Chair, SouthErik Paulsen - Vice Chair, MidwestBill Shuster - Vice Chair, NortheastGreg Walden - Vice Chair, West

Mark AmodeiAndy BarrMike BishopDiane BlackMarsha BlackburnCharles BoustanySusan BrooksVern BuchananLarry Bucshon, M.D.Michael C. Burgess, M.D.Ken CalvertJason ChaffetzTom ColeBarbara ComstockRyan CostelloAnder CrenshawRodney DavisJeff DenhamCharlie DentBob DoldSean DuffyRodney FrelinghuysenChris GibsonKay GrangerSam GravesRichard HannaDarrell IssaLynn JenkinsDave JoyceJohn Katko Mike KellyAdam Kinzinger Leonard LanceBilly LongFrank LucasTom MarinoKevin McCarthyCathy McMorris RodgersPatrick MeehanCandice MillerJohn MoolenaarRandy NeugebauerKristi NoemBruce PoliquinJohn RatcliffeTom ReedJim RenacciReid RibbleTom RooneyPeter RoskamSteve ScaliseJohn ShimkusLamar SmithSteve StiversGlenn ThompsonMac ThornberryMike TurnerFred UptonJackie WalorskiMimi WaltersEdward WhitfieldSteve WomackTodd Young

With 19 percent of the American people saying they do not trust the federal government, it goes without saying that most Americans view Washington as a dysfunctional place. And yet when you look back at some of the things that have been accomplished over the past 12 months, you can argue that 2015 has actually been a fairly productive year.

Congress approved Trade Promotion Authority for the President this past summer, and, this fall, reached agreement on a debt and deficit plan that, among other things, included the first significant reform to Society Security in more than 30 years. More recently, the parties have come together to approve a long-term highway bill to rebuild America’s crumbling roads and rewrite the No Child Left Behind Act to give states more control over what our children learn in school. While none of these plans and agreements are perfect, they collectively represent the kind of common sense compromise that has been in short supply in our Nation’s capital in recent years.

In this latest edition of THE RIPON FORUM, we look at another area where common sense is too often lacking and compromise is sorely needed – overregulation. In his first Inaugural Address, Ronald Reagan famously stated that, “In this present crisis, government is not the solution to our problem; government is the problem.” But even Reagan knew that government has a role in our society. He understood that in addition to promising to make government smaller, Republicans also had an obligation to make sure government operated efficiently and effectively. “Now, so there will be no misunderstanding,” Reagan declared in this same address, “it is not my intention to do away with government. It is, rather, to make it work.”

If there were ever an area where government needed to work, it is in the area of regulations. From clean air to highway safety, government has a responsibility, in the words of Abraham Lincoln, to do for the people “whatever they need to have done, but cannot do, at all, or cannot, so well do, for themselves.” Unfortunately, that responsibility has grown over the years to include more areas than Lincoln likely would have ever imagined. In fact, as Clyde Wayne Crews of the Competitive Enterprise Institute points out in this edition of the FORUM, if the regulatory state were a country today, “it would be the 10th largest in the world.” What led to this growth? According to author Philip K. Howard, the growth is due to a lack of proper oversight and good intentions gone astray. “American government today is run by dead people,” he writes, “past members of Congress who wrote all these statutes, and bureaucrats long gone who wrote the millions of words of regulations.”

Fixing broken government is not just about economics, argues House Majority Leader Kevin McCarthy in this latest edition. It is also, he writes, “about holding government accountable, putting a stop to corruptive influences in Washington, and ending the proliferation of bad rules.” McCarthy goes on to note that the House has passed legislation to tame the regulatory beast, and it remains one of the top priorities for Congressional Republicans in the coming year. As Republicans move ahead in this regard, they may want to look to the example set in South Dakota, where Governor Dennis Daugaard launched a “red tape review.” Daugaard writes that this review has “eliminated over 4,000 sections of law and regulations” and helped make South Dakota one of the top states in America to do business.

This latest edition of THE RIPON FORUM also includes an important essay by former House Appropriations Chairman Bob Livingston on the need for congressional reform, and a timely interview with former Congressman Mike Oxley on the career of his good friend and colleague, the recently-retired Speaker of the House, John Boehner.

And in our latest Ripon Profile, we feature one of the rising stars of the Republican Party, Florida Congressman Carlos Curbelo, who, among other topics, discusses his first year in Congress and the need to broaden the GOP’s base.

As always, we hope you enjoy this edition of the FORUM, appreciate your readership this past year, and encourage you to contact us with any thoughts or comments you may have.

Lou Zickar Editor of THE RIPON FORUM [email protected]


Seldom has there been such widespread agreement in Washington among Republicans and Democrats, Senators and House members, and most of the general public: Congress doesn’t function and something needs to change, soon.

The reasons why Congress doesn’t work are many. They cross party lines. They go beyond just Congress to the Executive Branch. They are affected by and in some cases caused by the media. They have caused public trust in their government to evaporate.

There is no sense pointing the finger of blame. There’s plenty to go around, and blaming others may be good politics, but it accomplishes nothing for the American people.

So, what to do? The first step to solving a problem is to understand it. The primary problem with Congress is that the legislative and political processes that dictate how we govern are outmoded and inoperable today. They must be reformed. The second step is finding a means to that end – a legislative vehicle for bringing about a change in the rules and a change in the law that will make Congress effective once again.

Let me give you a critical example of what’s broken, torn from the pages of the annual appropriations process.

As a former Chairman of the House Appropriations Committee, I believe it is imperative that the appropriations process be among the highest priorities for reform.

The Constitution specifically gives the Legislative Branch the power to spend money. Article 1, Section 9, Clause 7 reads: “No money shall be drawn from the treasury, but in Consequence of Appropriations made by law…”

This provision is the foundation of Congress’s “power of the purse” and is a duty the legislative branch undertakes each year. This process enables Congress to affirm the country’s priorities and set specific amounts for Federal programs and agencies. Congress has for most of its existence achieved this by dividing the

funding of most activities of government – transportation, homeland security, defense, education, foreign aid and other basic government operations – into individual appropriation bills, now 12 in number. Both Houses of Congress are supposed to pass these bills separately and reconcile their differences by the beginning of the next fiscal year that starts on October 1st. That hasn’t been done correctly since 1996. I know. I did it.

Here’s the problem. The Congressional Budget and Impoundment Control Act of 1974 requires Congress to first adopt an annual budget that sets spending levels for all of government. This relatively new budget process has made it difficult for the houses of Congress to produce its individual appropriation bills on time, or at all. The process is subject to constant delays and politicization.

Over these last 40-plus years, the Congress has been

able to complete all its appropriation bills on time on only four occasions.

Congress has more frequently, when encountering deadlines it can’t meet, resorted to interim funding or a packaging of some of the bills to prevent any stoppage of the necessary operations of government. But what was meant to be an emergency back-up procedure has become the regular order of the day. For more than a

Congress,Heal Thyself

The primary problem with Congress is that the legislative and political

processes that dictate how we govern are outmoded

and inoperable today.

ROBERTL.LIVINGSTON

Politics & Perspective


decade, the Congress has essentially extended the fiscal year for several months through continuing resolutions, and then at the last minute has had to pass all the appropriation bills in one omnibus bill. This results in the Congress voting on entire funding of government in one up-or-down vote on one piece of legislation with thousands of pages, with usually only the majority party voting “aye.”

This is bad government, bad politics and bad business for the country. This has also got to change. Some of that change must come in the Senate where s u p e r m a j o r i t y votes are required under their rules to proceed to consider individual bills. This makes individual a p p r o p r i a t i o n s difficult if not impossible to pass there.

Add to that toxic mix a continuing failure in both the House and Senate authorizing committees to authorize federal programs and agencies under their jurisdiction, including the establishment of the funding levels that guide what the appropriators ultimately fund.

This means that appropriation bills are also burdened with legislative language continuing many policy provisions (authorizations) in their bills. There are now annually more than $300 billion in unauthorized appropriations, many of which are absolutely critical to the national welfare, such as Homeland Security. The Congress must also recognize the need to force the authorizing committees to fulfill their responsibilities.

During the last effort at legislative reorganization, there was little focus on the appropriations process, as then Senate Appropriations Chairman Byrd testified not to encumber the process: “We need to make the goal not one of efficiency, but one of effectiveness.”

I agree that we must preserve the fundamentals of a separate appropriations process, but procedures must be changed. We currently are disenfranchising

Now is the time for Members ofCongress to regain their rightful stature andworktogetheronfindingaprocesstorestore and preserve their constitutional

responsibilities over appropriations.

the rights of individual members by denying them their right to influence and vote on the individual bills. We must examine whether the current fiscal year deadline is the proper date, and find a way to expeditiously move funding bills through both Houses of Congress and into conferences to resolve their differences.

James Madison believed that the “power of the purse” was the central responsibility of representative government. As he penned in Federalist Paper 58: “The power over the purse may, in fact, be regarded as the complete and effectual weapon with which any

constitution can arm the immediate r e p r e s e n t a t i v e s of the people, for obtaining redress of every grievance and for carrying into effect every just and salutary measure.”

Now is the time for Members of Congress to regain their rightful stature and work together on finding a process to restore and preserve their constitutional responsibilities over appropriations.

It is one more reason, one among many, for the Congress to create a special Joint Committee on the organization of Congress, which can serve as a repository for reform and make

recommendations to the full Congress. Reform should not occur on a piecemeal basis. It has to be done comprehensively to produce meaningful results worthy of the peoples’ trust.

Let’s call it the Joint Committee on the Congress of Tomorrow, because it is the future we need to be concerned about. Let this be the first step to move the Congress and the Executive into the 21st Century of effective, consensus-driven, public interest governance. RF Robert L. Livingston is a Founding Partner of The Livingston Group. He represented the 1st District of Louisiana in the U.S. House of Representatives for 22 years, and served as Chairman of the Appropriations Committee from 1995 until his retirement in 1999.


MICHAELBURGESS

With the holiday season in full swing, millions of Americans are bracing for the long traffic jams that may stand between them uniting with their loved ones. Planes, trains, and automobiles all contribute to transportation delays which have become an inevitable part of the holidays. However, the nation’s roadways remain one of the most efficient means of travel. They are fundamental to our economic and societal backbone – they connect us to family, friends, schools, businesses, and much more. While we are fortunate to enjoy such a thriving transportation system, much of that success is dependent on keeping the traveling public safe.

There is no doubt that cars are safer today than ever before. Many cars are now equipped with cameras and automatic braking features that give drivers greater situational awareness and can help them avoid crashes altogether. Cars may even be able to communicate with each other on the road as early as next year. The automotive sector is currently undergoing a technology revolution.

Despite these automotive safety advancements, automakers and the National Highway Traffic Safety Administration (NHTSA) have a responsibility to ensure the safety of the driving public. Automakers are required to meet strict safety criteria to sell vehicles in the United States. Following a record year of vehicle recalls due to safety defects, it is clear that automakers must do more to meet those standards, and congruently, NHTSA must do more to enforce them.

As we look to the future, embracing automotive technologies will provide even greater life-saving benefits. Simultaneously it is also imperative that NHTSA, as chief regulator of vehicle safety, keeps pace with the complexities of those next-generation technologies. Lives depend on it.

In the Commerce, Manufacturing, and Trade Subcommittee, which I chair, we have held several hearings over the last year to address vehicle safety issues. During those

hearings we have examined new technologies, like vehicle-to-vehicle communications and the internet of things.

As a result of these hearings, we were able to craft auto safety legislation that will modernize NHTSA, improve recall processes, and transition our view to the future, where there are boundless opportunities to improve safety and experience for those behind the wheel.

Working in a divided government has not made it easy to get important initiatives signed into law. But since taking over as chairman of the subcommittee, I have worked closely with NHTSA and its Administrator, Dr. Mark Rosekind, to improve safety compliance for automakers and dealers.

As part of the long term highway bill that was recently signed into law, we included a number of bipartisan provisions that will make the recall process work better for consumers, increase funding for NHTSA’s safety programs, and provide other meaningful safety reforms that will make automakers more accountable to safety regulators and keep NHTSA focused on its core mission of saving lives.

Safety behind the wheel is our top priority. We are joined by the automakers and NHTSA in that goal, and we are uniquely positioned on Capitol Hill to do something about it. To that end, our commitment to vehicle safety cannot stop with the newest model year or safety feature. It must define the work and culture of automakers, dealers, part suppliers,

safety officials, and all others contributing to the maintenance, development, and advancement of the industry. American motorists do not deserve any less than that. RF

Michael Burgess represents the 26th District of Texas in the U.S. House of Representatives. He serves as Chairman of the Energy & Commerce Committee’s Commerce, Manufacturing, and Trade Subcommittee.

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BRENTSKORUP

The current administration, frustrated with a Congress that won’t enact progressives’ policies, pushes federal agencies to twist existing laws until they are unrecognizable. This explains many of the Federal Communication Commission’s actions in the last few years, and it has just embarked on its boldest regulatory experiment yet – regulating our modern printing presses – broadband providers and other Internet-based media companies.

Twenty years ago, some farsighted lawmakers saw broadband Internet’s potential to transform communications, technology, and media. Therefore, in 1996 Congress amended the Communications Act to announce that “it is the policy of the United States” that the market for the Internet and Internet access should be “unfettered by Federal or State regulation.” Congress knew the FCC’s history of overreach and did not want the labyrinthine television, radio, and telephone regulations to limit the then-nascent Internet. As a result, the Clinton and Bush administrations shared an (imperfect) express hands-off policy regarding the Internet.

This benign neglect of the Internet encouraged rapid changes in several major industries as video, music, news, gaming, travel, and other services moved online. The Internet Age is one of content abundance and consumer choice. As the economic and social import of the traditional areas of regulation – like cable TV, local telephone, and broadcast radio – diminished in the 1990s and early 2000s, the FCC seemed prepared to accept its role as a more modest, specialized agency focused on paring back the regulatory edifices that it had built up since the 1930s.

That regulatory philosophy – dubbed “vigilant restraint” by Clinton’s FCC chairman William Kennard

– has been abandoned. The Obama administration is determined to reinvent the agency and shape this influential new medium, broadband Internet. According to this newer view, the FCC has all these powerful regulatory tools from earlier eras gathering dust – why not use them? Technological advance has defanged the FCC’s content controls, like the Fairness Doctrine, and industrial policy for broadcast, but the Commission has discovered or voted itself new tools to shape the communications and media industries.

Several initiatives mark the agency’s assertive role in the broadband era. The most notorious and significant attempt at agency reinvention--the 2015 Open Internet Order – came after President Obama implored the nominally independent agency to regulate the Internet. The President was encouraged by media activists who were alarmed, after several setbacks in federal court, that Internet companies might escape pervasive regulatory scrutiny.

The professional advocates and the President demanded “net neutrality,” which is a pliable term designed to obscure their less PR-friendly aims--applying common carriage telephone regulations to Internet providers and technology companies. With these phone regulations, called Title II, the FCC has tried to guarantee its long-term vitality by functioning as a zoning board for the Internet. Under these subjective rules, Internet service providers and tech companies

often must seek FCC permission before making changes to Internet-based protocols, technologies, and services. Even routine commercial agreements between Internet-based companies are subject to agency second-guessing and punitive fines. These new regulations plus the agency’s

The FCC:Obama’sBroadbandBully

The Clinton and Bush administrations shared an (imperfect) express hands-offpolicyregardingthe

Internet.

Brent Skorup


growing abuse of its essentially blank-check authority to approve media and communications mergers mean that the FCC will be instrumental in shaping what voices are heard over the airwaves, online, and on TV.

The FCC has also redirected billions of dollars of telephone subsidies toward broadband connections, despite the fact that, according to Pew surveys, less than 3% of Americans say affordability is the main reason they don’t use the Internet. These poorly-designed phone subsidy programs have been plagued by waste and fraud from the very beginning. Economists Scott Wallsten and Thomas Hazlett found that, at best, the cost to connect a hold-out household to the telephone network exceeded $100,000. There is every reason to expect waste to continue with the new broadband program since, per Pew, 92% of offline adults, most of whom are over 60, say they simply aren’t interested in subscribing.

The agency is also seeking to unilaterally negate states’ laws in order to fund government-owned broadband networks across the country. This violation of federalism

The Obama administration is determined to reinvent the

agencyandshapethisinfluentialnew medium.

undoes what several states have carefully implemented after finding that city-operated networks frequently turned into taxpayer-funded boondoggles and therefore should be deployed only sparingly. This major priority for the administration is likely to be ruled unconstitutional but it signals a disregard for federalism and for markets.

The late Clay T. Whitehead, a Nixon administration official, once noted that, “The main value of the sword of Damocles is that it hangs, not that it drops.” The FCC has voted itself several hanging swords in order to gain control over the structure

and composition of Internet-based economy. Limited government and free speech advocates must sound the alarm as the FCC attempts, based on pretext and flimsy legal rationales, to reinvent itself and regulate the most powerful mass medium yet. RF

Brent Skorup is an attorney and a research fellow focused on telecommunications and media policy. He is based in Arlington, Virginia.

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“There were times when I felt he was the onlyadult in the room who would actually tell the truth.”

Q&A with Mike Oxleyabout the career of John Boehner

had spent the past 40 years in the minority, but the political winds were starting to blow at their backs. Then, 1994 comes around, Republicans win control of Congress, and Boehner is elected Chairman of the Republican Conference – the 4th highest ranking position in the House. How did someone with only two terms under his belt rise so far, so fast? What qualities did he have that put him in that position?

MO: I think the key was that Newt Gingrich liked him and saw him as a future leader. Newt wasn’t good at some things, but he was pretty good at identifying talent. I think he

recognized that John had the leadership qualities necessary for that position and really advocated for him. That’s because leading up to that historic occasion when we took the majority, John had done his homework, worked hard, helped organize the House, and didn’t appear overly eager to take charge.

ShortlyafterJohnBoehnerwaselectedHouseMajorityLeaderinFebruaryof2006,then-ChairmanoftheHouseFinancialServicesCommitteeMikeOxleyissuedastatementpraisingBoehner’selectiontothepost.

“Hewillbringgood,soundOhiosensibilitiestothisimportantposition,”Oxleystated.“Heisaleaderwho is true to his principles, but who has shown time and time again that he can work across the aisle to reachbipartisanagreement…JohnBoehneristheperfectmanforthejobattheexactrighttime.”

OxleyknewBoehner’scharacterandqualificationsbetter thanmost. Bornfiveyearsand150milesapartintheBuckeyeState,theywereelectedtoCongresswithinadecadeofeachotherandsharedabrandofcommonsenseconservatismthatputsapremiumongovernanceandfindingsolutionstotheproblemsoftheday.TheyalsosharedaloveofgolfthathelpedforgeastrongfriendshipofftheHousefloor.

OxleyretiredfromtheHouseattheendof2006and,amonghismanypositionsandactivities,nowservesasamemberofTheRiponForum’seditorialboard.WithBoehnersteppingdownasSpeakeroftheHouse earlier this fall, the ForumsatdownwithOxleytoaskhimaboutthecareerofhisgoodfriendandcolleague.

RF: Talk about your relationship with John Boehner for a moment – how andwhendidyoufirstmeethim, and do you recall your first impressions about himat that time?

MO: Well, I first met John when he was running for the legislature. I already had been elected to Congress. He became a freshman member of the legislature. We first met at a political event – I’m not sure if it was for him or not – but it was a golf event, of course. It was the first time I played golf with him, and it was the first time I met him. We hit it off.

We had things in common – politics, golf, some mutual friends from Columbus who were associated with Republican politics or lobbying for different groups. So we had a lot in common for a lot of reasons, and that was the beginning of a long friendship.

RF: Talk for a moment about the Congress that Boehner was elected into in 1990. Republicans

“He was just a very even-keeled kind of Midwestern

conservative who made people feel comfortable in

his presence.”


He was just a very even-keeled kind of Midwestern conservative who made people feel comfortable in his presence and understood that he was a leader. Of course, he was part of the Gang of 7 that really shook things up and paved the way for the reforms that we made when we finally retook the majority.

RF: Flash forward three years, to 1998 – Boehner is booted out of leadership along with Newt Gingrich in what had to be one of the lowest moments of his congressional career. What was his attitude during that time, and talk about thepatience, resilience and discipline that allowed him to recover and work his way back up the leadership ladder.

MO: Yeah, it’s pretty amazing, you know. First of all, he was Chairman of the House Education & Workforce Committee and did an outstanding job in that regard. He was recognized as being even-keeled and for working in a bipartisan way with George Miller, the very liberal ranking member of the committee. John bent over backwards to get legislation passed, like No Child Left Behind, where he worked with Ted Kennedy. I think that most of the members that I talked to on the Democrat side were very praiseworthy of John for being a fair Chairman.

When I became Chairman of Financial Services, I learned that working with the minority can pay dividends in getting legislation passed, and you have a much better chance of it becoming law if you treat the minority with respect. Boehner did that. But he got caught in a weird kind of situation where everybody wanted to throw everybody else out and J.C. Watts was elected in place of John. I don’t think it was so much against John.

But I do think it’s kind of funny how things turned out. Newt was gone. Armey was gone. Paxon was gone. By 2005, Delay was gone. Ten years after we won the majority, all of the top leadership from ’95 was basically gone. But Boehner was still there. I think that is a real tribute to his steadfastness and to his standing with the majority in our conference.

That says a lot right there – that he withstood these challenges, came back, and became Speaker of the House. It’s extraordinary, and probably the only time that has ever happened in that kind of a sequence.

RF: Talk for a moment about his Speakership– he led the House during a very turbulent time politically. When people look back on his Speakership one year from now, what quality – or qualities – do you think they will realize they miss?

MO: Well, I think they will find out pretty quickly that, first of all, it’s a tough job – especially in today’s climate. John was the perfect fit for that because he had a lot of positive personal relationship on both sides of the aisle. People wished him well because he treated them like they wanted to be treated and he didn’t try to push anything down. He passed virtually every piece of legislation that the conservatives wanted. I asked a conservative once whether there was ever a bill – any bill – that they wanted passed where Boehner didn’t accommodate them. And he said

“no.” They tried to repeal

Obamacare about 30 or 40 times. The problem, of course, was the 60-vote rule in the Senate. Somehow, Boehner got blamed for doing what he could do, which was to pass legislation in the House. He had no control over the Senate. There were a lot of Senators out there who were blowing smoke about how pathetic Boehner was. How could they say that? He passed what he had to pass, and with large margins. So I think he really got a bum rap on that.

He did a lot of positive things in terms of the budget and other legislation. He didn’t get any credit for it, but down the road, I think it will look pretty good in the rear view mirror.

RF: Finally, looking back on his career – as Speaker, as Minority Leader, as Chairman of the Education & Workforce Committee, and as afreshman reformer – what do you think will be seen as his greatest achievements and lasting legacy on Capitol Hill?

MO: Legislatively, I think it was No Child Left Behind. Even though it is controversial now, he was very supportive of some needed changes in it at the time, which shows you how flexible and how common sense he was then and remains today. There were times when I felt he was the only adult in the room who would actually tell the truth.

In the end, I think providing that kind of steady hand – I can’t think of one individual over the past few years who could have guided the House any better than he did – helped him make a positive difference for the American people. RF

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Cover Story

The fight to cut government red tape and restore common sense to the lawWith essays by Majority Leader Kevin McCarthy, Governor Dennis Daugaard,

Philip K. Howard, Clyde Wayne Crews Jr. & others

Taming theREGULATORY BEAST


KEVINMCCARTHY

When Republicans talk about regulations, we usually focus on the economics. Regulations drag down our economy. They make hiring new employees more expensive. They increase the costs of goods and services for consumers. Reducing the burden of regulations would undoubtedly spur economic growth and improve the job market. However, that is not the only reason Republicans want to cut regulations and reform the regulatory state.

Long-term reform of how America handles and reviews regulations would not only help our economy, but has the potential to reduce government corruption and restore a constitutional system that returns ultimate power to the American people.

But we must first understand how and why regulation has become so harmful.

When our Founders drafted the Constitution, they recognized that the federal government couldn’t be trusted with unrestrained power. That’s what led to the creation of checks and balances, as well as regular elections, which allow the people or Congress to remove government officials who aren’t doing their jobs and protect the people from oppressive government.

Over our history, we’ve seen just how important these checks on power are. When President Franklin D. Roosevelt tried to pack the Supreme Court by adding additional justices who favored his theories of constitutionalism, the legislative branch blocked him and the people punished his overreach at the next midterm election. Likewise, if a congressman isn’t listening to his constituents or is misusing his power, the next election is only a short time away.

But in the Executive Branch where regulations are written and enacted, the reality is much different. When the administrative state was first created in the 20th century, people thought that removing political oversight or the threat of firing would free regulators to act with complete neutrality. That would allow decisions to be based not on what the people or

even elected officials want, but rather on what the “expert” regulators decide is in the people’s best interest.

The results of this have been disastrous. Rather than acting as enlightened despots in Washington (something freedom-loving people don’t want anyway), regulators are still imperfect people who can be corrupted like anyone else entrusted with power and without accountability. They also have a history of favoring interest groups over the common good, using the regulatory process to get around democracy when their policies are too unpopular to win at the ballot box.

Because of that, we have a series of regulations with the force of law that few read, fewer understand, and most don’t even want in the first place.

A prime example is the President’s clean power plan. This rule, if implemented, would damage businesses, drag down our economy, and hurt workers. But beyond these harmful effects, a Democrat-controlled Congress rejected largely the same policies just a few short years ago.

Ultimately, entrenched regulators in Washington don’t actually reflect what the people are concerned about because their decision-making process does not have to be transparent and the regulators themselves are unelected, unaccountable,

Regulatory Reform That RestoresGovernmentOf,By,andForthePeople

Fixing the administrative state and reducing the broken regulatory

system in America is about much more than economics. It is about

holding government accountable...


and can’t easily be fired.Add to that the various cases of fraud and

mismanagement within the executive branch that never get answered for — the hack of the personal data of millions Americans at the Office of Personal Management, the lack of firing VA bosses even after a terrible scandal, and the EPA employee who watched pornography for hours a day at work but couldn’t be fired, to name a few — and what we have is a system that is prone to corruption and is an affront to the very idea of self-rule.

So fixing the administrative state and reducing the broken regulatory system in America is about much more than economics. It is about holding government accountable, putting a stop to corruptive influences in Washington, and ending the proliferation of bad rules.

Though the system is deeply entrenched and will take consistent effort and courage to reform, Republicans in Congress have a strategy that is simple but will have profound effects: We must rein in the power of regulators and put that power back in the hands of Congress.

Republicans in Congress have a strategy that is simple but willhaveprofoundeffects:

We must rein in the power of regulators and put that power back in the hands of Congress.

That means laws that affect the people should be written by representatives elected by the people who must continually listen and react to what the people are asking for. When the buck stops with Congress, the people always have the ultimate authority.

House Republicans have already started the work of reforming this system by passing the REINS Act, which requires Congress to actively approve any rule with a large economic impact. This is a first step in making sure Congress, not the bureaucracy, passes laws and is held accountable for those laws.

When we stop the power of bureaucrats to act as legislators, America will not only be

economically stronger. We will have restored government of, by, and for the people that has made America so uniquely great in this world. RF

Kevin McCarthy represents the 23rd Congressional District of California. He serves as Majority Leader of the U.S. House of Representatives.

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PHILIPK.HOWARD

The battle line between right and left is drawn at big government vs. smaller government: But it’s largely a battle of rhetoric, not reality.

Government is big, really big — with 438 federal agencies and so many thousands of programs that no one has counted them. More are added every year. Big government is winning. Republicans are relegated to fighting a rear guard action — for example, with the proposed REINS Act, to prevent government from getting even bigger by asserting legislative authority to veto major new regulations.

What accounts for the invincibility of big government? Americans know it’s broken. According to a Clarus poll, over 80 % of Americans believe the federal government needs to be overhauled. Most liberals see the absurdity of wasteful and duplicative programs. Why can’t the will of the people get transformed into legislative change?

The roadblock is not ideological, but structural. Congress must change how laws are amended if it wants to take back control of government.

Our system favors the status quo. The rules of Congress make it almost impossible to repeal or modify old programs, no matter how broken or obsolete. Part of the blame lies with the Framers: they thought they would deter big government by making it hard to enact new laws. What they didn’t anticipate was that the same checks and balances make it hard to amend old laws. The

second part of the blame lies with post-1960’s culture changes, weakening authority in favor of individual rights throughout society, including within Congress. Speaker Sam Rayburn’s authority is a distant memory. All that’s needed to keep programs in place is a few congressional supporters.

American government is not managed by majority vote. It is run, as political scientist Francis Fukuyama puts

it, as a “vetocracy.” Any small group can prevent change. Who, then, is in charge?

Nobody. A m e r i c a n

government today is run by dead people — past members of Congress who wrote all these statutes, and bureaucrats long gone who wrote the millions of words of regulations. Year after year, all these programs have piled up — with 82 teacher quality programs, 47 job training programs, and procedural mazes that make common sense illegal in almost every public choice.

From the White House to the school house, everyone in government, even the President, is stuck in all this legal goo.

Congress accepts all this law as a state of nature. But no one designed this regulatory swamp. Congress in 1933 never intended Depression farm subsidies to be paid to corporate farmers 80 years later. Congress in 1975 never intended special education to drain over 25% from the total K-12 budget. Congress in 2008

How Congress CanFixBrokenGovernment

American government today is run by dead people — past members of

Congress who wrote all these statutes, and bureaucrats long gone who wrote the

millions of words of regulations.


didn’t expect Dodd-Frank to drive small banks into the arms of mega-banks that are too big to fail.

Government is broken not mainly because past lawmakers were stupid, but because legislative programs almost never work out as planned. Like riding a bike, you must lean this way and that to stay upright. But Congress almost never adapts laws when circumstances change. So they crash. It’s hard to find a government program that isn’t broken to some significant degree. The flaw is usually in implementation, not the regulatory goal. Most Americans think the FDA should approve new drugs. But should the approval process cost a billion dollars and take a decade? Environmental review of infrastructure projects is supposed to be 150 pages and take a few months — not run 10,000 pages and delay projects by a decade.

At this point, 50 years after the surge of regulation that began in the 1960s, American government is, literally, out of control. Laws and regulations passed decades ago plow into the future irrespective of changing needs and priorities. Government is too big, but not because it’s designed to work this way. Government is too big, and wasteful, and ineffective, because neither Republicans nor Democrats in Congress have the ability to adapt old programs to new realities.

The cure to runaway government is structural, not ideological. Congress must change its rules to reassert control over existing law. This should be approached not as a partisan battle of big government vs. small government, but as restoring the foundation of democratic responsibility.

Congress must take responsibility for all legislative programs, not just new laws. What’s needed is a practical way to adapt old law to meet new circumstances. This requires delegation of responsibility to smaller committees, subject to approval (but not micromanagement) of the whole. Here are two ideas:

1) To push the reset button on obsolete law, Congress could authorize independent committees to make overhaul proposals in each area, and then, as in

Government is broken not mainly because past

lawmakers were stupid, but because legislative programs

almost never work outas planned.

Philip K. Howard

the BRAC model, vote the proposals up or down; 2) Going forward, congressional committees

could have presumptive authority to change existing programs to make them work more effectively, and be accorded deference by majority vote except in unusual circumstances. This would work best as a matter of comity, so that leadership of either party could object if the changes effectively undermined the original legislative compromise. Another variation might be for committee amendments to earn deference if supported by a supermajority committee vote.

It’s not that hard to bring programs back to reality. In many areas, broken programs can be readily fixed

by creating clear lines of authority and accountability. For example, combining overlapping programs into one coherent structure only takes a few legislative lines. Streamlining infrastructure red tape from 10 years to two years can be achieved by giving the White House authority to resolve disputes among agencies. The total legislative package needed to cut through the red tape and unleash a surge of infrastructure investment — enhancing America’s competitiveness, creating a greener footprint and creating 2 million jobs — is less than three pages. (This proposal by the nonprofit Common Good, which I chair, can be found at www.commongood.org.)

Of course, no legislative reforms will work with hyper-partisanship. That’s just a formula for continued paralysis. Because the real enemy is the status quo — a huge, bloated blob of

ineffective government programs — and continued stalemate is the worst possible result. The only way to bring big government under control is for Congress to reclaim its authority to regularly update existing legal frameworks. RF

Philip K. Howard chairs Common Good, which advocates common-sense reforms of law and government. He is the author of several books, including The Rule of Nobody (2014) and The Death of Common Sense (1995).


CLYDEWAYNECREWSJR.

The U.S. National Debt clock tells us we’re over $18 trillion in the hole.

But at least we can measure that. Conversely, I’m here to say that, by being AWOL

on addressing the “hidden tax” of federal regulation, policymakers miss the government’s greatest impact in the economy.

By my reckoning, regulations cost some $1.8 trillion per year, a “hidden tax” half the level of today’s $2.5 trillion in annual federal spending. The regulatory burden exceeds individual income tax receipts of $1.39 trillion and corporate income tax of $333 billion combined.

Regulatory burdens even rival corporate pretax profits, of $2.2 trillion.

If the “regulatory state” were a country, it would be the 10th largest, between Russia and India.

Clearly, Congress has not only lost its grip on the power of the purse, it has relinquished its lawmaking power to federal agencies.

Consider: There were 224 laws last year, but 3,554 rules and regulations issued by unelected bureaucrats. I like to call the multiple (16 in this case) the “Unconstitutionality Index.”

Regulation from the unelected bureaus seems to be accelerating: of the six highest ever Federal Register page counts, five have occurred under President Barack Obama. And at 74,964 on November 30, the year 2015 may set another record.

Ill-founded, overlapping and unclear regulations (like over-taxation) undermine business creation and job growth. Startups are at a record low. Hiring is risky. The uncertainty created by Washington undermines entrepreneurial breakthroughs, slowing growth.

Rudimentary constraints on the regulatory state are lacking; fewer than one percent of federal agency rules get cost-benefit analysis reviewed by overseers at the White

House Office of Management and Budget. Executive oversight is weak already, yet President

Obama promises vetoes of the majority Republican 114th Congress’ reform proposals.

The President promised to veto the Regulatory Accountability Act of 2015 (H.R. 185), the signature

regulatory reform bill that passed the second week of the new session. It would codify some executive orders that define central Office of Management and Budget oversight of agencies’ regulations and cost-benefit analyses, and also formalize semi-judicial proceedings for major rules and address abuse of “guidance documents.” The Senate has yet to pass the bill, but should.

This year and in both prior Congresses, the House passed the so-called REINS Act (Regulations from the Executive In Need of Scrutiny) to reverse regulation. REINS would require an expedited congressional vote on all major or significant agency rules before they are effective.

REINS should be expanded to apply to any controversial rule, whether or not tied to a cost estimate that declares it major or significant

(such as the Federal Communications Commission’s net neutrality rule). Furthermore, congressional approval should extend further to guidance documents and other “regulatory dark matter” decrees.

This positive affirmation would be a major advance in accountability for each year’s thousands of regulations. The Senate hasn’t passed REINS yet — but the President promises a veto here, too.

Ultimately, only Congress can compare questionable rules to the benefits that could be gained if resources went elsewhere. So, Congress should also explore allocating

PenandPhone…MeetLiberty’sMeatAxe

If the “regulatory state” were a country, it would be the 10th

largest, between Russiaand India.

Clyde Wayne Crews Jr.


regulatory cost authority among agencies in a “regulatory budget.” A “budget” could incentivize other supervisory mechanisms like central review, cost analysis, sunsets, plus inspire agencies to “compete” with one another in terms of lives saved rather than think within their own box.

Perhaps the most promising option for bipartisan cooperation at the moment is a “regulatory reduction commission.” This body would initiate review, similar to the military base closure and realignment commission, of the entire existing regulatory apparatus (as distinct from the one-by-one appraisal that characterizes OMB review). The commission would compile a bundle of rules for rollback with expedited congressional vote.

Alas, today’s policy climate is quite different from the 1990s, when Republicans proposed outright elimination of agencies like the Department of Energy.

But at the very least, Congress should pass regulatory liberalization legislation in the Senate and force Obama to veto it, and get members on the record. Surely, some Democrats are not going to go to the mat for maintaining a regulatory state that harms their constituents.

Meanwhile, as the presidential election approaches, we might ponder what the executive’s “pen and phone” (a term popularized by Obama) can do to reduce rather than increase government influence in the economy.

We knew from our Constitution’s framers and we know now from the modern pen and phone era that, for better or worse, an energetic executive’s hands are far from tied. Alexander Hamilton sought a king, but settled for vigorously defending “Energy in the Executive.”

An “energetic” liberalization attitude prevailed in the executive branch during the Reagan administration and resulted in the creation of the very executive branch review and oversight process that we have now (albeit since watered down by Bill Clinton and Obama.) Reagan brought both Federal Register page counts and numbers of annual rules down by thousands.

Instead of a “pen and phone,” we can give “liberty’s meat axe” a try again.

The President must execute duly enacted laws; but the thousands of arbitrary decrees of unelected bureaucrats do not always require the same deference. The proper balance between the executive and legislative branches can be restored by a Congress that reasserts itself, especially in concert with an executive branch led by a President who knows when and how to say “no” to the seizure of power. RF

Clyde Wayne Crews Jr. is Vice President for Policy and Director of Technology Studies at the Competitive Enterprise Institute.

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“We don’t overregulate those who do business here.”HowCuttingRedTapehasHelpedFuelSouthDakota’sEconomicSuccess

Inmyfirsttermasgovernor, I started asking state agencies to identify unnecessary and complex laws and regulations that

could be repealed.

DENNISDAUGAARD

When people around the country think about South Dakota, the first image that comes to mind is probably Mount Rushmore. Of course, we’re proud to be the home of Gutzon Borglum’s masterpiece, but in truth we are much more than the stone-carved presidential tribute. South Dakota is a great place to do business.

But don’t just take it from me; as Governor, it’s my job to promote South Dakota. Read what others are saying.

A number of independent groups who conduct state-by-state studies are rating South Dakota at the top. Last month, the U.S. Chamber of Commerce Foundation, once again, named South Dakota’s business climate best of all the states. Earlier this year, CNBC named us no. 2 in the nation for business friendliness. We ranked second in the Tax Foundations’ State Business Tax Climate Index. We also ranked first in the Small Business & Entrepreneurship Council’s 2014 Small Business Policy Index.

Our business friendliness is in part a result of the financial stewardship exercised by governors and legislators over the last century. Since we became a state in 1889, the South Dakota Legislature has balanced the budget every year. We don’t do it with accounting gimmicks, either. We don’t push one year’s expense into the next. We don’t use one-time windfalls to fund ongoing expenses. We never issue general obligation bonds.

Many other states are required by law to balance their budgets also. But far too many of those other states achieve that “balance” by deferring their pension contributions, or by borrowing. These states have long-term liabilities – unfunded pension obligations and large general obligation liabilities. In South Dakota, we have neither of those things. Our state’s pension is more than

100 percent funded, and our per-capita tax supported debt is among the lowest in the nation. Other states will eventually be forced to confront those liabilities – probably at the expense of entrepreneurs and businesses.

Private enterprise is seeing success in South Dakota because we believe in allowing businesses to prosper. We have no corporate income tax, no personal income

tax, no business inventory tax, no personal property tax and no inheritance tax. This puts more money in the pockets of our businesses and citizens, creating a more favorable environment for growth.

Perhaps most importantly, we don’t overregulate those who do business here.

In 1913, South Dakota Governor Robert S. Vessey said in his State of the State address, “It is my conviction, and in it I am not alone, that the tendency of very many legislative bodies is toward too many rather than too few new laws and I again offer the oft-repeated statement that there is a demand for the reduction and curtailment of the amount of legislation biennially passed by the Legislature and placed among our laws.”

Governor Vessey was right. It’s the nature of government to add to the body of laws. When

someone is running for office, others tend to ask, “If elected, what will you do?” Elected officials sometimes take that to mean, “What law will you pass?” And we sometimes measure productivity by the number of bills that we pass.

With laws, more isn’t necessarily better. Laws should be clear, concise, and easy to follow. Government shouldn’t place unnecessary hurdles before our citizens or entrepreneurs, and things shouldn’t be overly complicated for people who are trying to follow the law.


In total, we have eliminated over 4,000 sections of law and regulations – which

amounts to a total of more than 450,000 words that have

been repealed.

That’s why, a few years ago, I began a red tape review. In my first term as governor, I started asking state agencies to identify unnecessary and complex laws and regulations that could be repealed. In 2012, we introduced our first round of “repealer bills.”

Over the last few years, legislators have been supportive of these bills and have even introduced their own red tape bills. In the last legislative session alone, we repealed 235 sections of law and 90 sections of administrative rules. In total, we have eliminated over 4,000 sections of law and regulations – which amounts to a total of more than 450,000 words that have been repealed.

We’ve repealed outdated provisions dealing with a wide range of subjects, from petroleum products, to county prisoners, to the federal census, to traction engines, to the medical department of the National Guard, and more.

Our efforts to cut red tape don’t usually generate a lot of headlines, but they’re important. Americans are

frustrated with government’s increasing tendency to become involved with small details of our daily lives. Business owners are trying to create jobs, farmers and ranchers are trying to stay in operation, and families are trying to make ends meet. It can be hard

for people to achieve these things when a government imposes unnecessary and overly-burdensome rules without regard for how those regulations affect individuals.

In South Dakota, we are making it easier for our citizens to know and obey our laws. We understand that businesses need to be able to plan for the long term. When considering moving or expanding, they

need stability and certainty. They need to know that government won’t get in their way. That’s what we are striving to offer here in South Dakota. RF

Dennis Daugaard is the 32nd Governor of South Dakota. He was elected in 2010.

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built a second course and a thriving business with a third generation of the family now involved. If the EPA gets their way, our land could be made practically worthless. We simply don’t have the money to hire someone to take us through the complex permitting process. This is a regulation that could do real and lasting damages to family businesses and we can only hope that the courts or a future President puts a stop to the madness.

KevinVanatta-OwnerNewberryMotorsNewberry,Michigan

The cost of regulation to the American economy is reaching an estimated $2 trillion annually. That is a huge and growing weight on our economic growth. For small business, regulations hit especially hard.

A few years ago, the Small Business Administration tried to figure out how much more costly regulations are to small businesses compared to larger ones. They found that it costs small businesses about 36 percent more to comply.

Federal agencies are continually churning out new and burdensome regulations at an astonishing rate. In just the last few months, the Obama administration has pushed forward

new rules that make electricity more expensive, that change long-standing rules for independent contractors, and that expand the reach of water regulations.

My business, Newberry Motors, sells a product that was highly regulated before the Obama administration. This President has piled on additional rules, driving the price higher and higher. The Heritage Foundation estimates that new fuel

RandyBallinger-OwnerWalnutCreekGolfCourseMarion,Indiana

When Congress passed the Clean Water Act, they wrote that it should cover “navigable waters.” For a while now, the Environmental Protection Agency has been pushing the boundaries of that law, trying to regulate tiny bodies of water and even

places where water only occasionally flows.This summer, the EPA released a new rule that could be

devastating for small businesses who own land. Effectively, the reach of the Clean Water Act would be pretty much

anywhere water can run. Almost any modification to your land could invite the scrutiny of regulators, leading to fines and fees that could be devastating.

Dozens of states and groups including the National Federation of Independent Business are suing to stop this from happening. There’s a good chance that they could win. Twice in recent years the Supreme Court limited the power of the EPA over water. Maybe this could be strike three.

The new regulation is so bad that a federal court actually stopped the EPA from enforcing it for now. No doubt they will fight all the way to the Supreme Court to expand their power.

The EPA’s talking points pretend that only the federal government can protect water when states already have significant power to regulate within their borders. Washington isn’t the only place where people care about the quality of our streams and rivers. Small businesses shouldn’t have to worry about duplicative regulations.

My family built our first golf course decades ago. We’ve

TheCostofOverregulation:America’s Small Business Owners Speak

“We simply don’t have the money to hire someone to take us through the complex

permittingprocess.”Randy Ballinger

“It’s impossible for a small business owner to keep up with the standard

regulatory process.”Kevin Vanatta

The Ripon Forum recently contacted the National Federation of Independent Business with a simple request–namely,tofindouthowfederalrulesandregulationsareaffectingthe325,000smallandindependentbusinessownerstheyrepresentaroundtheUnitedStates.

Belowarefirst-personaccountsfromfourNFIBmembersabouttheirownexperienceswithgovernmentredtape, how it is impacting each of their businesses, and how what often sounds like a good idea in Washington toooftencausesproblemsforhard-workingAmericansastheytrytomakealivingandgoabouttheirlives.


efficiency standards could raise the cost of a car more than $3,000 by 2025. What is the breaking point for consumers? We may find out.

The NFIB Small Business Legal Center recently put out a report documenting the many new ways that the bureaucracy is creating “underground regulations.” In recent years federal agencies have promulgated more than 80,000 pages annually in new regulations – and that’s only counting those rules that have gone through the formal notice-and-comment process. But increasingly, agencies are making new binding rules, under the radar, with obscure opinion letters, “guidance” documents, legal briefs and enforcement actions.

It’s impossible for a small business owner to keep up with the standard regulatory process. Underground regulations are just making it even harder to comply with all the rules.

SethReeves-OwnerReevesMortgageLongview,Texas

At Reeves Mortgage, we help people live their dream of owning a home. It’s a big decision. They may spend the rest of their lives in that home. It’s a big expense and there’s a certain amount of caution that should be undertaken by buyers

and banks. Unfortunately, the federal government has complicated that process; not to defend homebuyers, but to benefit highly connected banks.

A few years ago, the New York Attorney General, the Federal Housing Finance Agency, and Freddie Mac created the Home Valuation Code of Conduct. This

forced appraisers to work for an Appraisal Management Company, many of which are partially owned by big banks. The rule was a de facto law created outside the typical notice and comment procedure.

Small businesses like mine had no ability to object or even offer constructive criticism. The small business organization I’m a member of, the National Federation of Independent Business (NFIB), recently documented many of the ways government agencies are creating these underground regulations. Decisions made behind closed doors and with no input from the public are increasingly becoming the law of the land.

Tens of thousands of pages of regulation are

written through the standard process, and now small businesses have to also be worried about all sort of letters, enforcement actions, and amicus briefs that could affect how we are ruled. Federal agencies should regulate only with the consent of the governed. They should not be independent bureaucracies operating as the legislative, executive, and judicial branches all on their own.

PattiZayas-OwnerEmeraldMedicalStaffingCleveland,Ohio

There aren’t many bureaucrats who run a business before they embark on a career of writing regulations. It’s a big reason why all too often rules intended to help people backfire. I’m seeing this firsthand with a new Department of Labor rule extending overtime pay to home health care workers.

For many years, home health care workers were like many other domestic workers, they were not subject to typical overtime pay rules. Home health

care work is rather different from most other blue collar jobs, but now the government equates it with high impact jobs like construction or manufacturing.

Emerald Medical Staffing provides home health care workers, mainly for homebound elderly persons. Our reimbursements are fixed by insurers, so we have a hard cap when it comes to our personnel costs. We will now have to strictly limit worker hours.

Many of our customers appreciated having the same worker with them all week. Now, we will have to rotate workers out when they reach their limit. This will make both our customers and our workers unhappy.

The new rule doesn’t make a business more profitable – the only way that employers can actually increase wages. Businesses will adjust worker hours to prevent payroll costs from swamping their budget. Workers won’t see more take home pay, just more rules requiring them to document their hours.

There is no real upside to this rule change. At the end of the day, the only people who might get paid more are the regulators at the Department of Labor working overtime to check up on millions of workers now subject to increased oversight. This rule will only have negative effects on workers and businesses. RF

“Decisions made behind closed doors and with no input from the public are

increasingly becoming the lawof the land.”

Seth Reeves

“Homehealthcareworkisratherdifferentfrom most other blue collar jobs, but now

the government equates it with high impact jobs like construction or manufacturing.”

Patti Zayas

FAIRNESS. EQUALITY. INTEGRITY. They’re principles that we still practice.

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DAVIDJ .HEBERT As Philip Howard correctly pointed out in his 1995

book, The Death of Common Sense, government has systematically replaced Adam Smith’s invisible hand with the visible fist of government regulation. Unfortunately, government officials have doubled down on this losing proposition over the last twenty years. Even more unfortunately, it is the American people who must pay for this failed bet and are paying dearly – to the tune of $1.9 trillion.

Today, the need to reverse this course has never been greater. As evidence of this, all of the presidential hopefuls from across the political spectrum have said that they are in favor of striking onerous regulations to help get government out of the way of businesses and help grow the middle class. This aphoristic statement conceals as much truth as it contains, as several of these same candidates also want to impose new regulations. This essay highlights the records of top Republican and Democratic candidates and outlines what they are likely to do if elected as President.

When it comes to the Republican Party, every candidate is united on two fronts: the need to repeal and replace the Affordable Care Act and the idea that the middle class has been harmed due to overregulation. Some are more vociferous on these than others, with several supporting a freeze on new regulations, but the message is all largely the same. When it comes to growing the middle class, however, the differences are vast.

Donald Trump wants to tackle the issue of a stagnating middle class by making it more expensive

for American consumers to buy imports through aggressive tariffs and quotas. The idea here is that forcing American consumers to buy more American made products will create middle class jobs. Sadly, making consumers pay more for goods and services is a path towards poverty, not prosperity.

Marco Rubio is making a name for himself with his regulatory budget plan, essentially the idea that the only

way to get a new regulation passed is to strike an equally costly regulation from the books. In his time in the Senate, Rubio has been a champion of deregulation, notably his 2012 vote to allow individuals to import FDA-approved drugs from Canada. Allowing people to buy approved drugs from approved vendors in other countries would help keep healthcare costs down for everyone. He also wants to restrict H1B visas to high skilled foreign workers and ban companies that “abuse them from ever using them again,” but it’s unclear what his metric will be.

On the Democrat side, the general consensus is that corporate greed and Wall Street excess are ruining the middle class and that the solution is to regulate the behaviors that cause these problems to go away. What’s also clear is that the Democrats believe – given the primacy these issues have received at the debates – that imposing these new regulations is more important than striking

onerous ones. To be sure, there are differences between Hillary Clinton and Bernie Sanders, but they don’t seem as wide as the differences between the Republicans (at

FightingGovernmentRedTape:What the Next President Might Do

When it comes to the Republican Party, every candidate is united on two fronts: the need to repeal and replace the

AffordableCareActandtheidea that the middle class has been harmed due to

overregulation.

David J. Hebert


least, at the time of this writing). Hillary’s campaign focuses on excess corporate

greed and the idea that the one-percent are exploiting the workers, earning record profits while the wages of the middle class have either stagnated or declined. At the first debate, she opened by saying that she wants to “find ways so that companies share their profits with the workers who helped to make them.” She wants to regulate companies into giving paid family leave, has voted for mandatory equal pay for women, and wants to promote long-term growth by discouraging short-term profits through tax policy.

Bernie Sanders almost certainly agrees with Hillary Clinton on the above, but places a larger share of the blame for the current economic disaster on Wall Street. He wants to “reregulate” the banking system, believing that the Great Recession was a direct product of banking deregulation; deregulation which according to a Mercatus Center study didn’t happen. He also wants to reign in Wall Street speculating through a special tax and use the revenue from this new tax to pay for college tuition. Whether or not this plan is viable remains to be seen, but history has shown that college tuition has increased almost in lock step with increases in government subsidies for education, suggesting that this is perhaps not the wisest of plans.

While each candidate has recognized the need for relief from a broken regulatory system, most want to replace or supplement what we have currently. There are two exceptions to this: Ben Carson and Jeb Bush. As of this writing, it’s difficult to say in detail what Carson would want to regulate, though we do know from his 2012 book that he believes some markets do need regulation, with health insurance being his go-to example.

When it comes to Jeb Bush, he talks the talk

of a deregulator and, as his track record in Florida demonstrates, he also walks the walk of a deregulator. He has a specific regulatory reform plan. Like Rubio, he wants a regulatory budget. He also wants to get Washington out of the business of regulating and return that power to the states, reserving federal power only for cases where “state-based solutions are insufficient.” Further, he wants to “streamline the permit process so that infrastructure projects can be permitted or rejected within two years” and put a freeze on new regulations. These are lofty goals that will lead

to a tremendous reduction in the costs of overregulation if he can implement them.

While there may be problems in society that require regulation to solve, 1) that number is closer to zero than most candidates seem to think and 2) the number of problems that o v e r r e g u l a t i o n has caused is far greater. Looking through the Federal Registry, every single industry has regulations in place that may have been sensible in 1975 but are patently absurd in 2015, with the number of regulations growing each

and every year since. By constantly changing the rules, government has created intense regime uncertainty in the business world and wrought havoc on our economy. The current administration has been especially good at creating this regime uncertainty, and it looks as if the Democratic candidates are most likely to continue this trend. RF

David J. Hebert has a Ph.D. in Economics from George Mason University and is currently an assistant professor of Economics at Ferris State University. His specialties include taxation, regulation, and public policy.

On the Democrat side, the general consensus is that corporate greed and

Wall Street excess are ruining the middle class and that the solution is to

regulate the behaviors that causethese problems away.

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News & Events

WASHINGTON, DC – In a speech yesterday morning before a breakfast meeting of The Ripon Society, U.S. Senator Rob Portman (R-OH) laid out a case for rewriting the U.S. tax code, saying that American workers are the ones who are ultimately being hurt by the current system, and that reforming the system would help ease what he called “the middle class squeeze.”

“We haven’t reformed the international tax code in any fundamental way since the 1960s,” he stated. “With regard to the tax rate and broader reform on the individual side, we haven’t done anything since the 1980s. What’s happened during this period? Every single one of our competitors has reformed their tax codes. They’ve not only lowered their rates, but for the most part, the vast majority of the countries that compete with us have gone to a territorial type system.

“And we have sat back and allowed our tax system to become antiquated and inefficient, in part because it is hard to take this on. We talk about entitlement reform as being like the third rail on the New York Subway system, in that if you grab it, you’ll get electrified. I would suggest to you that the same is true with many other issues, and tax reform is certainly one of them.”

Portman serves as Chairman

of the Permanent Subcommittee on Investigations. In this position -- as in his past positions as a Congressman, U.S. Trade Representative, and Director of the Office of Management and Budget – he has been a leader in the effort to reform the U.S. tax code so it better serves American workers.

To that end, Portman stated that he and U.S. Sen. Claire McCaskill

(D-MO), the Subcommittee’s Ranking Democrat, convened a hearing this past July looking at the tax code and how it is putting U.S. companies at an economic disadvantage with their competitors around the world. Noting that Treasury Secretary Jack Lew plans to issue new rules in the coming week related to one of the topics of this hearing, corporate inversions, Portman stated that new rules will do nothing to improve America’s global

competitiveness, and reiterated that what was ultimately needed was comprehensive tax reform.

“With all due credit to him,” the Ohio lawmaker stated, “Secretary Lew does want to do business tax reform. But he also has to know that what he’s going to announce this week or next week makes no sense, because it doesn’t deal with

the underlying problem and, therefore, is not going to solve it. In fact, it will create additional problems. What’s going to happen? More and more of those companies will become foreign companies. Inversions are the tips of the iceberg.

“Last year, there was a doubling – a doubling – of the number of foreign acquisitions of U.S. companies. We welcome foreign investment in this country. What we don’t welcome is having a tax code that makes it so disadvantageous to be an American company that U.S. companies

are getting gobbled up by foreign companies, to the point that we’re going to look back four or five years from now if we don’t fix this and say, ‘What happened?’

Portman also commented on recent remarks by Massachusetts Senator Elizabeth Warren, who delivered a speech on Wednesday in which she criticized some of the tax reform proposals currently being discussed, calling them “a giant wet kiss” for American companies.

PORTMAN PUSHES FOR TAX REFORMSays Current Code is Hurting American Workers

and Squeezing the Middle Class

“We haven’t reformed the international tax code in any

fundamental way since the 1960s.”


“The people who get hurt under a 35% tax rate in the worldwide tax system are the workers,” Portman stated. “The Congressional Budget Office did a study on this that showed that 70% of the benefits of a lower rate and a more c o m p e t i t i v e system will go to workers in terms of higher pay and better benefits. The boardrooms are doing just fine. The idea of reforming this is not to help the big businesses. It’s not to give a ‘big, wet kiss’ to the big businesses and the boardrooms, as Elizabeth Warren is asserting. In fact, what she is advocating – which is to increase the noncompetitive nature of our code by keeping deferral light and by keeping the

rates high or even higher – is a big, wet kiss to our foreign competitors. And frankly, it’s a hug to the corporate boardroom.

“If we really are concerned

about the middle class squeeze … it is real. When I’m home in Ohio, I talk to people who have not seen their wages go up in five or ten years and have seen their expenses go up on the other hand. And now in Ohio, it’s not just health care costs which are skyrocketing. They’re now also seeing their electricity costs go up. We think Ohio is going to have to

“You ask people who are struggling about the percent of their budget that they have to

pay for energy costs, health care, or food. It’s growing,andyettheirwagesareflat.”

end up complying with all these new regulations. There are about five of them that have hit our power plants. We used to be 86% coal back when I first got elected, and now we’re

70%. We think rates are going to go up by double-digits over the next 10 years. So your electricity costs when you turn on the lights are going to go up, tuition costs are up, food costs are up.

“You ask people who are struggling about the percent of their budget that they have to pay for energy costs, health care, or food. It’s growing, and yet their wages are flat. There are lots of proposals out there to deal with this, and lots of ways to give the economy a shot in the arm. I can’t think of one that is more obvious than tax reform.” RF

“Over the course of the 50 years that Ripon has existed,it really has been very helpful in terms of shoring up our

party – frankly helping to broaden our party.” SPEAKER JOHN BOEHNER JANUARY 22, 2013

Founded 1962. www.riponsociety.org

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Name: Carlos CurbeloOccupation: U.S. Representative (FL-26)Youstartedamediarelationsfirmrightoutofcollege.Howhasowningyourownbusinessaffectedyourapproachinpublic life? Owning my own business instilled in me many life-long lessons which have proven indispensable throughout the years. One important skill that I regularly find myself practicing is time management. As a family man who balances working in Congress and spending time with my two very young daughters, I use this skill on a daily basis.As the grandson of a man who was once a political prisoner under Fidel Castro, why is it a mistake to renew relations with the people of Cuba today? As the son of Cuban exiles, I am proud of our nation’s rich ethnic diversity. I know, from first-hand experience, the great and generous spirit of the American people and the opportunities our nation provides to all who are willing and able to work for it.Regarding Cuba, President Obama has ignored the realities and the ruthless and violent nature of the Castro regime. Unfortunately the President is putting American national security interests at risk and prolonging the suffering of the Cuban people living under the oppressive dictatorship. It is crucial to remember that the men in power of Cuba today are the same men who had nuclear missiles pointed at the United States in the Cold War. The Administration has afforded the Cuban dictatorship a myriad of unilateral concessions while receiving little in return. America must once again take up the mantle of the protector of human rights and the promoter of democracy; however we cannot accomplish this as long as we confer legitimacy on military dictatorships. I will continue to work to restore our place as a leader on these issues. As a Cuban-American, do you believe the Republican Party is doing enough to broaden its base? We have to do a better job of sharing our story with young and minority voters. The Republican Party led the reform movement that has saved U.S. public education. I’ve seen this firsthand in Miami-Dade, where we rescued public education from mediocrity. That’s important to a lot of Hispanic families, in particular, because they know that their children will need the best education possible to move up in life. Young people want higher education to be more affordable, and we’re working on that. Republicans also want to save Social Security and Medicare for young people. I’m 35, and I know that many people my age don’t believe they’ll ever get benefits back from those programs. Democrats don’t even want to acknowledge that those programs face a long-term funding crisis. Republicans want to make the reforms that are necessary to ensure those programs will still be around in the future.AsyourfirstyearinCongressiscomingtoaclose,whathasproventobeyourgreatest legislative success so far? I am proud of H.R. 1386, the Small Entrepreneur Subcontracting Opportunities (SESO) Act which is my first piece of legislation to pass both the House and Senate and be signed into law by the President. Also, as a former Miami Dade School Board Member, I am proud of our recently passed bill in the House, the Every Student Succeeds Act which will replace and improve upon No Child Left Behind. This bill included my provision which grants English Language Learners additional time to become proficient in reading and math and puts children, not Washington Bureaucrats, at the center of America’s education system.On the other hand, what has been your greatest legislative challenge? Though this year has been filled with great moments, I have also experienced some challenges. I’d say that one of my greatest legislative trials has probably been finding common ground to update our current Cuba policy, while still making the changes that are necessary to have productive reform. This has been one of my top priorities this year and something I will continue to fight for.

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