Regulatory Sunset

Automatic Expiration of Regulations

Each year, roughly 3,000 new federal regulations are added to the more than one million restrictions that complicate American life and further bind our economy. When added to 135,000 state-level regulations, most small business owners find themselves on an impossible quest for compliance. 

The burdensome and unnecessary red tape increases the costs of goods and services, kills jobs, and discourages innovation.   

Sound regulation relies on accountability, transparency, and reviewability. But bureaucratic agencies have little, if any, incentive to adhere to these ethics. And many large corporations advocate for onerous regulations that inhibit competition. 

As a result, the U.S. Code of Federal Regulations has grown by more than 20 percent since 1997 and now contains 1.08 million instances of restrictive language. As a result, GDP is 25 percent smaller than it would have been—undermining the American economy, disproportionately harming workers, and resulting in future losses measured in trillions of dollars. 

The mountain of regulations only continues to grow, despite many being outdated, unnecessary, redundant, or based on laws that have been repealed.  

Old regulations that no longer serve the public should be eliminated—but when a rule is created without an expiration date, it is unlikely to be reviewed ever again. Agencies are unmotivated to address problems in their regulations, and potentially harmful regulations stay on the books indefinitely. This is unsustainable. 

All state-level regulations should go through a full review process, including public notice and comment. After review, agencies or the legislature can choose to renew or repeal the regulations. Regardless, all regulations should have an expiration date no later than 10 years after they go into effect. 

This is the best way to ensure that economy-crushing regulations disappear while those that serve the public good remain.