Politics & Policy

Regulation Hill

Even a Republican Congress taxes and spends and regulates too much.

No man’s life or liberty is safe when the legislature is in session. Never has that been more true than when Congress is hanging around Capitol Hill anxious to demonstrate its ability to pass laws–any laws–no matter how expensive, unnecessary, or ill-considered. So, now that Congress is home for its summer break, Americans are thankfully safe–at least for the time being. But it won’t be long before members return to Washington, ready to tax, spend, and regulate.

They’ve done far too much of that already; so far the session has been a disaster. Congress approved an energy bill filled with billions in subsidies and billions more in special-interest tax breaks (so much for making permanent the president’s tax-rate cuts). There’s been money for almost every group with a letterhead and a lobbyist. Up to a billion dollars is likely to go to the Texas Energy Center–in Majority Leader Tom DeLay’s hometown of Sugar Land–for research on oil and gas drilling. Why should the petroleum industry be expected to pay to improve the technologies that enable it to make money?

More awful still is the $286.5 billion transportation bill. It included $24 billion in purely pork barrel “special” projects. There’s an incredible $1 billion for Alaska alone, a pay-off to Rep. Don Young (R., Alaska), who chairs the House Transportation and Infrastructure Committee. Three million dollars of that will go for a documentary film “about infrastructure that demonstrates advancements in Alaska, the last frontier.”

But pork respects no ideology or party. Sen. Ted Kennedy (D., Mass.) took credit for $330 million in special highway projects. Even Rep. Mike Pence (R., Ind.), head of the House Conservative Caucus and a celebrated deficit hawk, proudly touted $16 million in projects that “will spur economic development and improve the quality of life for thousands of Hoosiers.”

It’s a miracle that the total burden of government, as measured by the Americans for Tax Reform, did not increase this year. According to ATR, /”Cost of Government Day” fell on July 4, the same as 2004. But that’s only because the economy grew more rapidly than expected. Had growth matched initial projections, COGD would have fallen on July 8. However, even July 4 demonstrates that government costs way too much. It’s more than half of the year and is five days beyond the COGD in 2000.

The index, which includes expenditures and regulation, is being driven almost entirely by runaway spending. Rising outlays accounted for 97 percent of the COGD’s advance over the last five years. In contrast, regulatory costs actually declined as a percentage of national income for the second year in a row. All told, Americans now work 83.4 days to pay Uncle Sam’s bills, and they spend 42.2 days laboring for state and local officials. Federal regulations, however, consume the fruit of another 36.2 days of work; state and local rules soak up 22.2 more. You have to go back to Lyndon Johnson’s presidency to find a time when domestic outlays have risen more quickly.

But although the modest decline in the regulatory burden is welcome, it also might be largely illusory. After all, the organization explains that regulatory requirements impose sometimes invisible negative economic effects which “slow the economy, as they introduce inefficiencies and distortions, and reduce the economic reward left over for productive activity.”

Despite a Republican president, last year the number of pages of the Federal Register hit a new high, up 6.2 percent over the year before. A /joint study by the Mercatus Center and Washington University reports that the administration is proposing still more staff and money for regulatory agencies next year. Clyde Wayne Crews of the Competitive Enterprise Institute recently published the latest edition of his ever-depressing /”Ten Thousand Commandments,” a study on federal regulations. He figures that total regulatory costs ran $877 billion last year, more than all pre-tax corporate profits and more than total income-tax collections.

There are two groups of citizens in America. One pays taxes. The other spends the taxes collected. There are two political parties in America. Both believe in spending every cent that can be raised, whether through taxes, fees, loans, or something else.

But for a short while, at least, the American people are safe. Congress has gone home.

Doug Bandow is a senior fellow at the Cato Institute and a member of the Coalition for a Realistic Foreign Policy. He served as a special assistant to President Ronald Reagan.

Doug Bandow is a senior fellow at the Cato Institute. A former special assistant to President Ronald Reagan, he is author of Foreign Follies: America’s New Global Empire and Beyond Good Intentions: A Biblical View of Politics.


The Latest