A relentless message from the business community is that regulations cost too much in many respects. In simple terms of dollars and cents it seems their concerns are well founded. The federal regulatory burden imposed a cost of nearly $2 trillion in 2017, according to a recent survey conducted by The Competitive Enterprise Institute (CEI).
In its 25th anniversary edition of Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, of the size and scope of the federal regulatory burden, its author, CEI Vice President for Policy Clyde Wayne Crews Jr., points out that this is a cost to consumers, businesses, and the U.S. economy. It is a cost to the average household of $15,000 annually.
Crews found, in reviewing the first year of the Trump Administration, that President Trump has possibly done the best job at slowing the growth of new regulation since the administrative state began its rise. However, there are warning signs that federal agencies are already on track to reverse his progress, he warns.
Crews uses the best available data—in the absence of thorough government accounting—to create a go-to resource on how federal regulations affect Americans’ business, community, and everyday lives.
Said Crews, “President Trump’s regulatory reform atmosphere of ‘one-in, two-out’ has eliminated or streamlined some prior regulation, and greatly slowed the flow of new rulemaking. These are good things, but there are warning signs. President Trump’s own apparent affinity for strong antitrust enforcement and protectionist trade policies threaten to undermine the economic gains from his regulatory reform efforts. Furthermore, despite certain successes of the two-for-one program, official data, so far at least, indicate agencies plan more regulatory actions than deregulatory ones in the longer-term. Ultimately, permanent regulatory streamlining will require Congress to act.”
Highlights of the 2018 edition of Ten Thousand Commandments include:
* The $1.9 trillion “hidden tax” of regulation is greater than the corporate and personal income taxes combined. If the cost of federal regulations were a country, it would be the 8th largest, behind India and ahead of Italy.
* From the gas pump to the grocery store, this “hidden tax” is passed on, and is equivalent to just under $15,000 per household annually, or 20% of the average household income.
* In 2017, the Trump administration issued 3,281 final rules—that’s the lowest number of regulations coming out of federal agencies in a given year since the National Archives began publishing rule counts in 1976.
* One of the most noteworthy of Trump’s achievements is his steps to address the proliferation of significant guidance documents, memoranda, and other decrees that can have regulatory effect—what Crews calls “regulatory dark matter.”
* In 2017, Washington bureaucrats issued regulations at a rate of 34 for every one law Congress enacted. The five agencies issuing the most rules are the Departments of Commerce, Defense, Transportation, and the Treasury and the Environmental Protection Agency.
* Although Trump’s “one-in-two-out” regulatory process was technically effective at cutting some red tape, only with the help of Congress will this progress last. Regulation is a bipartisan issue and members of Congress need to work together to address excess. Needed are more transparency, oversight, and congressional accountability. These all will improve cost analysis and “budgeting” of federal regulations.