Social Studies July 2007

Flying Blind in a Red-Tape Blizzard

Based on spending, President Bush appears to be the biggest regulator since the Nixon-Ford years.

If liberal public-interest groups' portrayals of Bush as the anti-regulatory Antichrist are any indication, the administration may be acting as a stricter gatekeeper than its predecessors did. Even so, the Bush administration may be regulating both more efficiently and more extensively. It may be raising the cost-benefit bar for major rules in such traditional domains as the environment, while also extending regulation's reach.

The only way to be sure would be to analyze the thousands of regulations promulgated in recent years and score them on efficiency and scope. Through a glass darkly, however, it is possible to make out the fuzzy outlines of a familiar Bush pattern.

According to the Mercatus-Weidenbaum report, the bulk of the increase in regulatory spending and staffing is for homeland security: such functions as airport screening (the creation of the Transportation Security Administration alone accounts for 80 percent of the staffing increase under Bush, though only 29 percent of the spending increase), maritime and border enforcement, new air-cargo rules, and so on. Subtract homeland security, and Bush turns out to be as tight a regulator as Reagan was, with annual growth of regulatory spending and staffing at rates of 2.6 percent and 0.1 percent, respectively, through 2006.

Prepare, then, for a shock of recognition: On regulation, as on everything else, the Bush administration's war on terrorism is driving an expansion of government.

Are we getting our money's worth from Bush's security-driven burst of regulation? The answer, unfortunately, is that no one knows. The science of cost-benefit analysis, which took decades to get a handle on economic and social regulation, has yet to find any purchase at all on security regulation. Figuring out whether a 20 percent reduction in particulate emissions makes economic sense is difficult (it depends on many intangibles, such as how much human health is worth), but it is at least roughly do-able, and the government often tries to do it.

Security costs and benefits, by contrast, are notoriously conjectural. We can estimate the cost of an attack on the Brooklyn Bridge, but not the attack's likelihood. Estimating the benefits of security is even more difficult, because averted attacks are generally invisible and because hardening one target may merely displace terrorist activities to others, increasing risk elsewhere.

Those analytical problems are compounded by a strategic one: The greater a potential vulnerability, the less willing security officials are to help economists quantify it. Douglas Holtz-Eakin, who was the Council of Economic Advisers' chief economist in the first two years of the Bush administration before becoming director of the Congressional Budget Office, recalls asking agencies to justify proposed security regulations by providing specifics about threats. "They said, 'There's no way we can disclose that,' " he says. In the government, he adds, "I don't know of any serious thinking about the benefits and costs" of homeland-security regulation.

Jeremy Shapiro of the Brookings Institution notes in a recent paper ("Managing Homeland Security") that since 9/11, federal homeland-security spending has roughly tripled. He writes, "Policy discussions of homeland- security issues are driven not by rigorous analysis but by fear, perceptions of past mistakes, pork-barrel politics, and insistence on an invulnerability that cannot possibly be achieved."

Regulation has been no exception. "They're trying to do pretty much everything everywhere," says Veronique de Rugy, a senior fellow with Mercatus.

Upsetting old structures and balances but not managing to replace them with sustainable new ones—in effect, governing as if in a perpetual state of emergency—has become a defining pattern of Bush's presidency: in foreign policy (notably Iraq and the Middle East), in fiscal policy (unsustainable spending increases and tax cuts), in legal affairs (executive overreach in the handling of detainees).

To the list of the next president's headaches, add untangling and rationalizing the reels of red tape that the Bush years have unspooled.

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Jonathan Rauch is a contributing editor of The Atlantic and National Journal and a senior fellow at the Brookings Institution.

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