Tale of the Red Tape: $22 Billion in Savings from Cutting Ridiculous Regulations
Policy + Politics

Tale of the Red Tape: $22 Billion in Savings from Cutting Ridiculous Regulations


For years, some fishermen were required to file weekly reports with a federal agency on their catches — even on weeks they didn’t fish. Falconers had to obtain permits from both the state and the federal government to go hunting. And state workers involved with a federal Summer Food Services program stuck with USDA paperwork equivalent to 25,000 hours a year.

Those examples of burdensome government red tape are among the outdated, often irrational and typically costly federal regulations eliminated as part of a regulatory improvement program President Obama ordered in 2011. A report issued late last week by the White House Office of Management and Budget claims that 179 “retrospective initiatives” or regulatory improvements since then will achieve $22 billion in savings over the coming five years.

Related: Americans More Concerned About Over-Regulation Than Economic Inequality

Howard Shelanski, the administrator of OMB’s Office of Information and Regulatory Affairs, cited a compilation of agency reports last month indicating that roughly 24 rules already have been stripped from the books as a result of the long-term review.

Some of the canceled regulations are mundane and absurd, like the one that required licensed commercial fishermen to report weekly on their activities to the Commerce Department, even if they didn’t fish. That alone will eliminate a projected 78,000 reports a year, according to Shelanski.

Also being scrubbed are the regulations that saddled summer food service workers with endless paperwork mandated by the Department of Agriculture, and the one requiring falconers to hold dual state and federal licenses.

Related: The Downside of Government Regulation — Business Paralysis

Others are far more consequential. A coordinated effort by the Army Corps of Engineers and a handful of other environmental and transportation agencies has led to a revision of federal permitting procedures that will make it easier for businesses and states to acquire approval for major transportation and other infrastructure projects.

The Department of Homeland Security has eliminated a rule that forced about 18,000 mariners to obtain a transportation worker ID every year, saving them considerable time and money. The Small Business Administration plans to streamline and automate its small business loan program. That change will save applicants 50 hours of work per loan application.

Related: Obama’s Rule Reforms Panned by Business and GOP

And the Social Security Administration earlier this month announced a new online program for obtaining a replacement Social Security card electronically. OMB claims that this initiative will save an estimated $78 million over five years and spare people from having to visit a Social Security office and then wait for a card to arrive in the mail.

Congressional Republicans have long called for regulatory reform to free businesses and consumers of wasteful government regulations. Obama and many of his predecessors have tried, with varying degrees of success, to cut through government red tape to save money and spur economic growth. “We should have no more regulation than the health, safety, and security of the American people require,” Obama said in 2011 in issuing his executive order seeking the overhaul. “Every rule should meet that commonsense test.”

While it’s difficult to monetize the benefits and costs of federal regulations, OMB calculated the benefits to consumers, the government and the economy at $217 billion to $863 billion between 2003 and 2013. At the same time, it estimated that excessive government regulations cost $84 billion as a result of inefficiences and higher costs to consumers.

But others think the adverse effects of excessive government regulations are much greater. The conservative Competitive Enterprise Institute estimated total losses as a result of federal regulations at $1.88 trillion in 2014, according to one report.