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The lurking red tape problem

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This month marks the third anniversary of the landmark executive order signed by President Trump establishing a regulatory budget for executive agencies that has triggered a substantial reduction in all of the regulatory burdens imposed on the economy. As of last fall, the administration had laid claim to nearly $51 billion in regulatory cost reductions through that measure, a remarkable swing given that there was more than $100 billion in new costs each year under President Obama. Beneath this overarching deregulatory trend, however, one area of the regulatory state has been going in the opposite direction when it comes to the paperwork burden.

According to Office of Management and Budget data, it took more than eight billion hours for individuals, businesses, and organizations across the country to fill out government forms three years ago. Today, that sum stands at nearly 11 billion hours. If each of those hours is worth $25, the national average wage rate across all occupations, this additional burden represents more than $57 billion in increased opportunity costs. In other words, Americans spend an additional $57 billion worth of time filling out government paperwork rather than carrying out more productive tasks.

The kicker is that the cost of this new paperwork burden essentially wipes out the estimated regulatory savings that the administration has worked toward. So how, under a president so devoted to deregulation, could this have happened? Long story short, creating or cutting paperwork involves a very different process than the overall rulemaking procedures, one that, in absence of similar political prioritization, has mostly run on autopilot.

The Paperwork Reduction Act establishes the framework for the Office of Management and Budget to monitor the national paperwork load. The law directs agencies to manage and cull their portfolio each year. Without any real enforcement teeth, however, it has only been responsible for marginal shifts at its best. A particularly illustrative example of its impotence is that the Information Collection Budget, a report cataloguing agency activities regarding the Paperwork Reduction Act that is supposedly required on an annual basis, has not actually been published in more than three years.

Clear opportunities for reform exist on both the legislative and executive sides. Congress could consider revisiting the Paperwork Reduction Act to include more definite enforcement mechanisms. Any action on this issue could draw bipartisan support, as reducing paperwork requirements has the added bonus of generally avoiding the political debates surrounding agency authority or health and safety concerns. Congress could also take steps to more carefully consider those potential paperwork changes that legislation might require. This change could be similar to consideration of certain regulatory impacts under the Unfunded Mandates Reform Act.

For the administration, there should be a renewed focus on avenues for reform, such as winnowing out government forms attached to outdated regulations and statutes, using more common forms including data that applies to multiple agency missions, and providing greater public access to electronic forms. If any paperwork requirement does not have a direct effect on the core mission of an agency, it should be ripe for reviewing.

All of this could be a part of an paperwork budget similar to its regulatory budget that has been so successful in limiting regulatory expansion. One of the most notable achievements of this administration has indeed been regulatory reform. As it now moves into the final year of its term, a much more assertive approach to reducing paperwork would be a fitting move.

Dan Goldbeck is a regulatory policy analyst at the American Action Forum.

Tags Business Congress Donald Trump Finance Government President Regulation

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