Friday’s Washington Post ran a “Fact Checker” column that awarded “three Pinocchios” to Speaker John Boehner for saying that “the Executive Branch has 219 new rules in the works that will cost our economy at least $100 million.” Perhaps it is testimony to what a confusing behemoth the federal bureaucracy has become, but the Post column appears not to understand how the federal government’s rulemaking system actually works: Whatever the complaints about nuance, the Speaker’s comments were fundamentally right.
For more than 15 years, an executive order issued by President Clinton has required that, twice each year, federal agencies and OMB prepare a “unified regulatory agenda” that lists “all regulations under development or review” (Executive Order 12866, paragraph 4(b)). That agenda is publicly available at Reginfo.gov. It is a standard reference used by agencies, academics, regulated parties, and others in the public who are interested in regulation. It currently lists 4,257 rules.
any rule that the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget finds has resulted in or is likely to result in –
(A) an annual effect on the economy of $100,000,000 or more;
(B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or
(C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States based enterprises to compete with foreign-based enterprises in domestic and export markets. 5 U.S.C. §804(2).
The key purpose of identifying the major rules is to be able to identify those with the most significant economic impacts. As shorthand, to avoid having to recite the entire definition, people often refer to them as the most costly rules, or the potential $100 million+ rules. The administration’s current regulatory agenda identifies 219 major rules.
Hence, the truth is that there are 219 major rulemakings listed on the Obama administration’s current regulatory agenda. And that is more than the 182 major rulemakings that were listed only one year earlier — on the Obama administration’s Spring 2010 regulatory agenda — and is also more than the 175 major rulemakings listed the year before that, on the Spring 2009 regulatory agenda. The point that Speaker Boehner was making is fundamentally correct.
Missing that, the Post’s “Fact Checker” instead debated the nuance of the composition of the 219 rulemakings listed as “major” on the Obama administration’s current regulatory agenda. The column argues that some of those potentially may not cost more than $100 million, either because they involve entitlement and other spending regulations that put “more money in people’s pockets,” are still at preliminary stages that won’t get completed this year, or involve rules with benefits as well as costs. But with regard to rules that transfer federal funds, where does that money come from? That is money that the federal government takes out of the economy by taxes or borrowing. And rules that increase fees for government services, such as passports, affect our economy, too. With regard to 42 planned major regulations that are listed as “long term actions” or “pre-rule stage” that probably won’t get completed this year, so what? The regulated parties see what’s coming, and that affects our economy. With regard to rules that are claimed to have benefits in excess of the costs, that does not mean the costs don’t impact the economy. Finally, with regard to some rules on the regulatory agenda that are listed as “completed actions,” it is up to the administration to say why they included those on an agenda that is supposed to identify the regulations “under development or review.” But these are the data the administration put out, and it is hardly fair to expect the Speaker to try to figure out why the administration included them. It seems peculiar to criticize the Speaker by suggesting that the administration’s own announced regulatory agenda is unreliable and overbroad.
Perhaps most important, the Post’s column seems to have missed the forest as well as the trees, in that there is no doubt that major regulations overall impose very significant costs on the economy. OMB itself has reported in its 2011 Report to Congress that major regulations in 2010 involved costs of at least $6.5 to $12.5 billion. That $12.5 billion was a greater cost than in any year during the last decade, while $6.5 billion would be more than all but one year in the last decade. On top of that, President Obama sent Speaker Boehner a letter in August that further acknowledged at least seven pending rulemakings on the current regulatory agenda that involve more than $1 billion each. Whether any individual regulation is wise or foolish, no one can pretend that federal regulations do not involve significant costs and have an important impact on our national economy.
The Post column’s confusion highlights that greater transparency about regulatory costs is needed. In the future, the semi-annual regulatory agenda should be a candidate for improved information disclosures. But the simple fact is that the Obama administration’s current regulatory agenda includes 219 rulemakings identified by the administration itself as “major.” Anyone concerned about the effect of regulation on the economy is certainly going to pay attention to those, even if they are not all identical to one another in their impacts. Speaker Boehner was right to draw attention to those rules on the current regulatory agenda.
— Jeff Rosen served as general counsel and senior policy adviser at the White House Office of Management and Budget from 2006 to 2009.