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4 Regulation 44 (1980)
Truth in Regulatory Budgeting

handle is hein.journals/rcatorbg4 and id is 106 raw text is: make it seem more natural to treat them as public expenditures outright, and easier to cali- brate them according to the good behavior of the groups and individuals affected. This possi- bility-easy to dismiss, hard to evaluate-could dwarf the problems of cost measurement and other technical aspects of implementing a reg- ulatory budget. It is worth pondering at length before we invest too much effort in the details of implementation. If there is anything to it, the regulatory budget might join a long list of government programs which, for all of their abstract appeal, end up achieving nearly the opposite of their intended results. 0 D -J'La -K 7ZN 2JA_ Ln I Zol> DD =D GOVERNMENT PROGRAMS are expected to bring benefits; they also have costs. For many of these programs, the total (or social) costs imposed on society are largely the same as their administrative costs and thus are largely measured by the fiscal budget-over which there are direct legislative controls. But this is not true for regulatory programs. In their case, most of the social costs are not re- flected in the fiscal budget. Instead, they are borne by the private and public organizations being regulated and are, therefore, not subject to legislative controls. This situation has be- come a matter of growing concern. With in- creasing frequency in recent years, legislation authorizing a new regulatory program has stated broad goals but then given the agency broad discretion on implementation. There are no direct constraints on the magnitude of the cost burden that can be imposed on society to achieve these goals. The regulatory budget is one proposal for dealing with this phenomenon. It has been sug- gested largely in the context of health, safety, and environmental regulation and takes its cue from the normal fiscal budget for government. Just as Congress authorizes broad fiscal pro- Lawrence J. White is professor of economics at New York University. grams but then allocates specific spending budgets for each agency for each fiscal year, Congress could pass broad regulatory pro- grams but then place annual limits on the costs that each regulatory agency could impose on the sectors it regulates. Thus, each regulatory agency would have its own regulatory budget, and there would be a total regulatory budget for the entire federal government. The legisla- tive process for this new budget could parallel the legislative process for the existing budget. (For greater detail on many aspects of the reg- ulatory budget, see the preceding article by Christopher C. DeMuth.) The Major Problem There are, unfortunately, a number of prob- lems with the concept of the regulatory budg- et. For example, to administer the proposal, either the management and oversight capa- bility of the Office of Management and Budget would have to be greatly enlarged or some new budgetary agency of at least equal size would have to be created. Also, the budgetary burdens on Congress-apparently onerous even now, judging by the delays that plague the appropri- ations process-would become much heavier. 44 AEI JOURNAL ON GOVERNMENT AND SOCIETY

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