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Regulating Regulations: New Rubio Proposal Flawed

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MARCO RUBIO
ASSOCIATED PRESS

Sen. Marco Rubio (R-Fla.), a potential presidential candidate in 2016, is trying to stimulate a serious discussion about the cost of government regulation and its impact on our economy.

Rubio proposed last week a new way to examine the impact of regulations when he outlined new policy initiatives in an address sponsored by the Jack Kemp Foundation.

Rubio urged the establishment of a National Regulatory Budget that would track and limit the number and cost of federal regulations. He also proposed the creation of an independent agency that would determine the cost of existing regulations.

Under Rubio's proposal, once the cost of a regulation is established, Congress would then "cap" the number and cost of its impact, which he argued has stymied an economic recovery.

The idea is to begin to eliminate wasteful and outdated rules in order to make goods and services cheaper and easier to deliver.

Sounds simple enough, and right, too.

In 2010, the U.S. Small Business Administration estimated that the total annual cost of federal regulation was $1.75 trillion.

But reforming regulatory control must take into account both individual and societal benefits derived from a regulation and weigh that against its cost.

Indeed, Danny Vinik in the New Republic argued that regulations can't be looked at strictly in economic terms"

The ultimate problem with Rubio's plan is that it actually has nothing to do with cost-benefit analysis. On the contrary, it sets a cap based solely on the economic costs of regulations, regardless of their benefits.

Since the advent of the New Deal, federal regulation has grown to such an absurd point that almost every act or movement we make -- from the light bulb we use to the TV programs we watch -- is regulated in some way by the federal government.

The result: a decades-old battle pitting conservatives, libertarians, and "free-market" advocates who disdain regulation against liberals who try to use regulations to protect the rights and safety of citizens and to safeguard the environment.

President Obama's re-election carried with it a mandate to expand inefficient and wasteful government reach into American lives.

The Heritage Foundation, a conservative think tank, has estimated that since January 2009, when Obama took office, 106 new "major" regulations have been enacted, at a total estimated cost of $46 billion, plus almost $11 billion more in implementation costs.

In 2011, the Center for Automotive Research released a study that measured the impact of anticipated fuel economy and safety mandates on the U.S. automotive market and industry in 2025. They found that it will cost a car owner from $3,700 to $9,000 more than the buyer will save in lower fuel costs.

Under Rubio's proposed formula, such regulations would be eliminated. But his formula doesn't assess the economic benefits of energy independence, cleaner air, new research and development jobs. The new standards could well create spin-off products and engineering methods that would enhance the lives of every American.

To reform federal regulation, politicians need to do more than improve the rules. More importantly, both liberals and conservatives need to abandon the dogma and being to compromise and govern pragmatically.

Rubio is right in arguing that excessive regulation needs to be addressed. But his proposal lacks common sense and should serve only as a starting point in the effort to better regulate our regulations.

This post originally appeared in Context Florida.

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Steven Kurlander blogs at Kurly's Kommentary (stevenkurlander.com) and writes for Context Florida and The Huffington Post and can be found on Twitter @Kurlykomments. He lives in Monticello, N.Y.