Policy Studies Governance

Interpretive rules are missing piece in regulatory-reform debate

The attached policy short was co-authored by Daniel J. Richardson.

Regulatory reform has garnered significant attention lately, both in Congress and on the campaign trail. Republican nominees for president each have released plans to tackle regulatory overreach, while congressional Republicans have advanced a variety of reform bills.

Much of the attention to this issue is driven by research finding an increase in the overall federal regulatory burden. In arriving at this conclusion, researchers have used different measures of regulatory activity. Some have looked to the number of pages published in the Federal Register. Others have considered the number of major rules promulgated in recent years or the total costs of regulations as a monetary sum. Most scholars recognize that none of these measures are perfect, given the wide disparity in effects different sorts of rules have and the disparate reasons that agencies publish in the Federal Register.

However, there is a more fundamental reason these numbers do not paint the full picture. Many regulatory-reform initiatives focus on the traditional rulemaking process, which includes publication in the Federal Register, opportunities for public comment and codification in the Code of Federal Regulations. Rules promulgated through this process often are referred to as legislative or substantive rules. For instance, legislation introduced in recent sessions of Congress as the Searching for and Cutting Regulations that are Unnecessarily Burdensome (SCRUB) Act would require reviewing current regulations captured in the CFR, while the Regulations from the Executive In Need of Scrutiny (REINS) Act would raise the procedural hurdles before agencies could implement a subset of legislative rules that are shown to have significant economic impact.

While these steps certainly would erect barriers to new regulations and could help cull some old ones, much federal regulatory activity happens outside the formal procedure these reforms presuppose. This other activity has gone by many names. Agencies refer to these actions as guidance documents, “no action letters” and public notices. Clyde Wayne Crews of the Competitive Enterprise Institute has labeled this kind of activity the “dark matter” of the regulatory state. Regardless of the label applied, the impact of these rules comes through their classification as “interpretive” in nature.

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