The “Regulatory Reduction Pilot Program,” expected to be signed into law soon by Virginia Gov. Ralph Northam (D), highlights how meaningful reforms are achievable with cooperation from both major political parties, even in the Trump age.
On the surface, the law is similar to many of the regulatory reform bills being introduced elsewhere. It aims to reduce regulations and other similar requirements by 25 percent over a three-year period. But in this case, the law targets dictates from two state agencies: Virginia’s Department of Professional and Occupational Regulation and Department of Criminal Justice Services.
There is a lot for both parties to like about this legislation. Republicans around the country are zeroing in on regulation that hinders growth and limits economic opportunity. While some occupational licensing regulations can make sense, others create unnecessary hoops for people to jump through before they can earn well-paying jobs to support their families. These laws also protect established professionals and businesses from competition from new upstarts.
Meanwhile, Democrats and others who prioritize fair treatment for vulnerable populations also have something to like. The burdens of licensing often fall disproportionately on people with low incomes , as well as groups like military spouses and immigrants. This was among the conclusions of a 2015 report from former President Obama’s Council of Economic Advisors.
The report seems to have lit a fire under the licensing reform effort, but free-market economists like Milton Friedman have railed against these laws since the 1960s. Licensing reform illustrates a sweet spot whereby libertarian economics and progressive concerns come together, and helps explain why the narrowly Republican-controlled legislature in Virginia is working closely with a newly elected Democratic governor.
Like occupational licensing, criminal justice is another area where the two sides find common ground, and it relates to another issue that’s easy to agree on: over-criminalization.
Academic research suggests there may be as many as 3,600 to 4,500 federal criminal offenses. Furthermore, Congress creates new crimes at a rate of about 57 per year. But this doesn’t account for many “regulatory crimes” (crimes for violating administrative regulations as opposed to traditional criminal laws that target activities like murder or burglary) or crimes found in state and local statutes and regulation.
One estimate from 1990 put the number of these federal regulatory crimes at over 300,000. That number sounds high, but consider that Virginia has more than 130,000 regulatory restrictions on its books, and some states have as many as 300,000 of their own.
Not every restriction can result in criminal sanctions, but a sad consequence of the ever-growing regulatory state is that, eventually, we may all become criminals. And when everyone is a criminal, those who enforce the law — be they local police, federal investigators, or regulators — have to find a way to prioritize whom to prosecute and whom to leave alone. If these enforcers have perfect judgment, there is nothing to worry about. But we can’t expect that, they may inevitably be tempted to selectively enforce the law.
Some of us worry about unfair treatment of minorities by the police; others complain about allegedly being targeted by agencies such as the Internal Revenue Service. The rise of regulation explains both phenomena: An overly complicated legal system invites abuse and spawns injustice.
Despite the tribalism all around us, the red and blue teams are working together in Virginia. If the pilot program is successful, it can be extended to other regulatory agencies and serve as a model for other states. More important, it’s a reminder that finding common ground isn’t as elusive as we think. There may just be a way out of the partisan morass.
James Broughel is a research fellow with the Mercatus Center at George Mason University.