The Government's Permitting Regime Is Choking the Economy

Vice President Kamala Harris thinks U.S. Steel should not have the right to sell its business to Japan’s Nippon Steel. Previously, some Republican senators thought they too should have the ability to kill the deal between private companies. And it doesn’t stop there. During the pandemic, airlines had to get the government’s permission to hand out hand sanitizer to passengers. Energy projects are subjected to years of permitting processes. And, of course, in most places, Americans aren’t allowed to build what they want on their own property without subjecting themselves to government authorization.

Welcome to the permission-slip economy. It shouldn’t be this way.

Permitting reform isn’t just bureaucratic minutiae; it’s a critical, deeply moral issue for anyone who believes in free markets, individual liberty, and economic progress. Our permitting regime is a web of red tape that stifles innovation, slows growth, and leaves Americans poorer, less free, and increasingly frustrated with a government more interested in regulating than enabling prosperity.

This isn’t some esoteric topic for policy wonks; it’s about the real, tangible effects of overregulation on Americans’ daily lives. Housing costs, job availability, energy prices, and technological advancement all hinge on how our government handles permits. And right now, it’s failing miserably.

Take housing. Some areas like California and New York City face a crisis largely due to onerous permitting processes. Builders must navigate a Kafkaesque labyrinth of regulations just to break ground, assuming they are even allowed to build. These delays add years to construction and inflate costs by tens of thousands per unit.

This isn’t mere inconvenience; it’s a genuine disaster for middle- and low-income families priced out of the market. The American dream of homeownership is being strangled by red tape. Worse yet, Americans are priced out of lucrative labor markets because rents are so artificially inflated in job-rich cities.

But that’s just the beginning. Permitting processes are choking the energy sector. Important infrastructure—pipelines, wind farms, grid modernization—is being held up for years by endless environmental reviews, public comments, and lawsuits. Now, two judges have signaled to developers that permits which took years to obtain could be canceled on a whim if subjected to pressure from the climate activists.

This isn’t just bad policy; it’s economic sabotage resulting in higher prices, less reliable supply, and missed opportunities for cleaner, more efficient energy.

What about other infrastructure? Roads, bridges, and transit systems fail to get fixed when approval for repairs takes years or sometimes decades. An outdated, bloated process prioritizes procedure over results, making some projects obsolete before they begin. Meanwhile, the government wastes massive amounts of money on infrastructure subsidies when all we need is to allow people to build.

The free market thrives on innovation and speed, allowing swift responses to societal needs. The current system is its antithesis—slow, cumbersome, and designed to prevent change rather than facilitate it.

It’s not just harming businesses; it’s harming everyone. Imagine what we could achieve with reform: affordable housing, more jobs, lower energy prices, modernized infrastructure. We could unleash a new wave of American innovation and growth. Yet these reforms are repeatedly blocked by bureaucrats protecting their turf, politicians appeasing special interests, or activists who believe halting progress is virtuous.

The time for permitting reform is now. Every delay means lost opportunity for Americans who deserve better: a government facilitating progress, not impeding it; a truly free market, not one shackled by bureaucracy; a future where prosperity trumps paperwork.

The good news is that there are many permitting reform ideas out there. Of course, in an ideal world, building and innovating should generally be permitted by default. Short of this, creating a “one-stop-shop” federal permitting agency to reduce redundancies—a single point of contact for applicants to coordinate between different agencies—should be a priority. This would be coupled with strict timelines for permit reviews, including a “shot clock” mechanism where permits are automatically approved if no decision is made by the deadline.

Environmental reviews should be streamlined by radically reforming the National Environmental Policy Act process, setting page limits on environmental impact statements, and allowing for more categorical exclusions for routine or low-impact projects. State-level reforms should be encouraged through federal incentives, and a “presumptive approval” system should be implemented for routine projects.

This isn’t just good policy; it’s a moral imperative. Permitting reform is about restoring a healthy power balance between government and individual and ensuring that America remains a place where innovation thrives, entrepreneurs succeed, and opportunity is universal. It’s about reclaiming the principles that made this country great.

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Source: https://reason.com/2024/09/05/the-governments-permitting-regime-is-choking-the-economy/