Dear Members of Congress,

The undersigned organizations call on Congress to implement a regulatory cost budget to address federal regulations, which frequently have the effect of tax increases. Like federal spending, regulations and their costs should be capped, tracked and disclosed annually.

The need for reform is urgent. The government’s cost burden imposed on American families and businesses extends well beyond taxes, deficits, and borrowing. The country spends hundreds of billions of dollars annually on red tape. That’s a big drain on the economy, entrepreneurship and job creation. And it’s not just regulated businesses that pay. Just as firms pass on tax costs, firms also pass on regulatory compliance costs. It’s a burden that hasn’t gone unnoticed, as a Pew Research Center poll revealed.

The current rulemaking process is broken. The executive branch can and does go around Congress and the states on matters such as healthcare, retirement, labor policy, education policy— and not solely by issuing normal regulations. The Obama administration in particular has escalated the use of agency guidance documents, memoranda, bulletins, manuals, circulars and other proclamations.

The current reporting and accountability by federal agencies is abysmal. Agencies impose costs and proclaim benefits with little meaningful constraint. Cost-benefit analysis at the agency level amounts to mere self-reporting and accompanies only a fraction of rules. So lawmakers don’t know much about the size and scope of the problem.

Congress should act now to require better reporting, more accountability, and better cost reduction. Specifically, Congress should pass a budget that includes the regulatory budget put forward by House Budget Committee Chairman Tom Price (R-Ga.) in the new House Budget Resolution for fiscal year 2017. The chairman’s budget is remarkable for including a section on “Policy on Federal Regulatory Budgeting and Reform.”

The resolution calls for critical reforms:

Note that the idea of a regulatory budget is not new. Former Sen. Lloyd Bentsen (D-Tex.) proposed legislation in 1979 to cap compliance costs and establish an annual regulatory budget. More recently, Sen Mike Lee (R-Utah) put forward a “Regulatory Cost Assessment Act” and Sen. Marco Rubio (R-Fla.) a “National Regulatory Budget.”

With the recognition of the regulatory hidden tax alongside the budgetary one, we urge Congress to seize this unique opportunity to assert control over the regulatory state and enact significant reforms.


Competitive Enterprise Institute

American Commitment

Americans for Tax Reform

Campaign for Liberty

Center for Individual Freedom

Center for Regulatory Effectiveness

Citizens Against Government Waste


Frontiers of Freedom

Log Cabin Republicans

Main Street Growth Project

National Taxpayers Union

R Street Institute

Small Business & Entrepreneurship Council

Taxpayers Protection Alliance

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