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The Leaflet: States Should REIN in Regulations

February 6, 2018

Regulations have stifled U.S. economic growth. Wisconsin's REINS Act is taking major steps toward returning the fate of businesses back to their owners.

State and federal bureaucracies have dramatically increased their power over the past few decades. Regulations crafted by the numerous departments and agencies of executive branches have had wide-ranging impacts on businesses across the United States and are increasingly affecting overall economic growth and job creation.

Economic growth in the United States was reduced dramatically by unnecessary and costly regulations imposed by the Obama administration. According to a 2016 study by the Mercatus Center at George Mason University, the U.S. economy been slowed on average by 0.8 percent per year since 1980 due to the cumulative effects of regulation. The study estimates if the regulatory burden placed on the economy had been held constant at levels observed in 1980, the U.S. economy would have been about 25 percent larger than it was in 2012.

More attention needs to be paid by legislators to the effects regulatory laws have on businesses and workers. A new law recently passed in Wisconsin, the Regulations from the Executive in Need of Scrutiny Act (REINS Act) could serve as a model for other states to follow. The Wisconsin REINS Act aims to limit the growth of the state’s regulations and bureaucracy by requiring the legislature to give final approval to any state regulation that has an economic impact of $10 million or more within its first two years. Gov. Scott Walker (R) signed the Wisconsin REINS Act on August 9, 2017.

Tennessee is the most recent state to propose legislation modeled after the REINS Act. Tennessee’s proposal would limit the growth of state regulations and bureaucracy by requiring the state’s legislature to give final approval to any state regulation that has an economic impact greater than $1 million over three years.

In a Policy Tip Sheet on state REINS proposals, Senior Policy Analyst Matthew Glans and Policy Analyst Timothy Benson outline why state legislators should be concerned about the growth of the regulatory state and how REINS laws could help restore regulatory sanity.

There is no proposal better suited for cutting back on the scope and power of government than REINS laws. They give lawmakers the power to limit the power of unelected bureaucrats while leaving federal agencies appropriate flexibility to implement new regulations. It is important to remember that these proposals do not prevent agencies from making new regulations; they are simply designed to ensure new rules that are projected to have a major impact on the economy receive appropriate scrutiny from elected officials before being enacted.

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Author
Arianna Wilkerson worked in government relations at The Heartland Institute from 2017 - 2019.