Thom In The News
| Aug 09 2017
When I became North Carolina House Speaker in 2011, I inherited what could be modestly described as a “mess.” North Carolina was one of the hardest hit states by the Great Recession and the economic outlook was dire with a contracting workforce and a 10.3% unemployment rate. To make matters worse, the state was on the brink of a fiscal crisis that was caused by our predecessors in the state legislature who had spent years overspending, overregulating, and expanding the size and scope of state government.
The outgoing Democratic leadership left behind a budget shortfall of $2.6 billion, pension funds had been sorely underfunded, the state’s rainy day fund was dangerously depleted, teacher pay was stagnant, and billions of dollars in debt owed to the federal government had been accumulated.
I became only the second Republican elected to serve as speaker in nearly a century because North Carolinians entrusted Republicans to fix the budget fiasco, enact comprehensive tax reform, and get our economy turned around. That’s exactly what we set out to do.
However, understanding the full effect of our budget crisis, it quickly became apparent that an extensive tax overhaul would not be possible until we got our fiscal house in order. So, we used a broad regulatory reform strategy to provide the immediate certainty that job creators desperately needed to expand and innovate.
We took historic, bipartisan action to modernize North Carolina’s antiquated and counterproductive regulatory state. The approach was two-fold: eliminate unnecessary, burdensome, or duplicative regulations; and change how regulations were reviewed, implemented, and challenged. Each rule struck represented less intrusive compliance costs, and the periodic review to justify why rules were necessary and prevent duplicative regulations provided the certainty that the business community needed to thrive.
This regulatory reform strategy proved to be a major success. Businesses had more freedom and flexibility to grow and create jobs, which in turn boosted state revenue that was then used to pay for the historic 2013 tax relief for North Carolina families and businesses. The combination of comprehensive regulatory and tax reform played pivotal roles in making North Carolina’s economy one of the fastest growing in the nation today, an amazing turnaround from the double digit unemployment it experienced only years ago.
Based on our success in North Carolina, I’m a true believer that regulatory reform is the primary foundation for igniting economic growth and job creation, and I have taken my first-hand experiences to the U.S. Senate.
What I found at the start of my term in 2015 was a regulatory regime in Washington even more burdensome and out of control than the regulatory climate confronting North Carolina at the end of 2010. The federal government’s regulatory system has little oversight, costing taxpayers billions of dollars a year and significant time in man-hours. To put this into perspective, a 2015 report from the Office of Management and Budget said that Americans spent nearly 10 billion hours complying with federal requests for information.
Fortunately, we now have an administration that is working with Congress on growth-focused and business friendly policies, and regulatory reform is finally a top priority in Washington.
Since January, Republicans in Congress have made effective use of the Congressional Review Act (CRA) to eliminate 14 burdensome rules implemented by the outgoing Obama administration. Rolling back these 14 rules alone will save our economy billions of dollars and millions of hours in compliance costs over time. That is real money back in the pockets of hard working Americans without reforming a single provision in the tax code or cutting a single program in the budget.
It’s a great start, but as I learned in North Carolina, rolling back specific regulations is necessary but not sufficient when it comes to true reform. We also have to change the process itself, which is why I’ve joined my Senate colleagues to introduce two bills that make key reforms.
The Separation of Powers Act would eliminate the infamous Chevron deference, which requires federal judges to defer to federal agencies against private citizens. Chevron deference has effectively allowed unelected bureaucrats to impose costly regulations unchecked. This legislation corrects that problem and restores separation of powers.
The second bill is the Sunshine for Regulatory Decrees and Settlements Act. If enacted, it would prevent special interest groups from bypassing the regulatory process through consent decrees and settlement agreements. Also known as “sue-and-settle,” this practice takes the most affected parties—businesses and states—out of the rule-making process. The bill would greatly improve the transparency and accountability for how federal agencies write and implement rules and prevent the courts from being used as an unelected legislative body.
These bills are ultimately about taking power away from the federal government and putting it back in the hands of the workers and job creators who drive our economy and create jobs. This legislation is about implementing a balanced approach that recognizes that while many regulations are absolutely necessary to protect the American people and our resources, many others are redundant, unnecessary, or even counterproductive to our economic well-being.
In North Carolina, we proved that regulatory reform, when done properly, has far-reaching, positive effects that include meaningful growth, increased productivity and job creation. Washington is finally on track to demonstrate the same for the rest of the nation.
Read the op-ed here.