Every year we are reminded how much money the government filches from us on Tax Day. However, there is no equivalent ‘Regulation Day’ to remind us the extra cost government imposes on us through pettifogging regulation. The fact is that federal regulations (never mind state and local) cost even more than the skyrocketing federal budget deficit, and help bring the federal government’s share of the economy to over 35 percent. Thankfully, my colleague Wayne Crews reminds us of this fact every year.
Regulations cost $1.75 trillion in compliance costs, according to the Small Business Administration. That’s greater than the record federal budget deficit — projected at $1.48 trillion for FY 2011 — and greater even than all corporate pretax profits. This is only one of many findings of the new edition of Wayne’s “Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State,” a survey of the cost and compliance burden imposed by federal regulations.
The costs of federal regulations often exceed the benefits, yet they receive little official scrutiny from Congress. (Just last week, the admirable Rep. Ed Whitfield asked an EPA official for an example of a regulation being rejected because the costs outweighed the benefits. The official couldn’t think of one.) Wayne urges Congress to step up and take responsibility for the state of the nation by reviewing and rolling back economically harmful regulations.
Among the report’s findings:
• The Federal Register stands at an all-time record-high 81,405 pages.
• In 2010, federal agencies issued 3,573 final rules.
• While agencies issued 3,573 final rules, Congress passed and the president signed into law a comparatively “few” 217 bills. Considerable lawmaking power is delegated to unelected bureaucrats at agencies, an abuse addressed recently in proposals such as the REINS Act.
• Alarmingly, proposed rulesin the Federal Register have surged from 2,044 in 2009 to 2,439 in 2010, a jump of 19.3 percent.
• Of the 4,225 rules now in the regulatory pipeline, 224 are “economically significant” meaning they wield at least $100 million in economic impact—this is an increase of 22 percent over 2009’s 184 rules.
• Given 2010’s government spending (outlays) of $3.456 trillion, the regulatory “hidden tax” of $1.75 trillion stands at an unprecedented 50.7 percent of the level of federal spending itself.
• Regulatory costs exceed all 2008 corporate pretax profits of $1.463 trillion.
• Regulatory costs dwarf corporate income taxes of $157 billion.
• Regulatory costs tower over the estimated 2010 individual income taxes of $936 billion by 87 percent—nearly double the level.
• Regulatory costs of $1.75 trillion absorb 11.9 percent of the U.S. gross domestic product (GDP), estimated at $14.649 trillion in 2010.
• Combining regulatory costs with federal FY 2010 outlays of $3.456 trillion reveals a federal government whose share of the entire economy now reaches 35.5 percent.
Wayne urges reforms to make the regulatory costs more transparent and accountable to the people, including annual “report cards” on regulatory costs and benefits, and congressional votes on significant agency rules before they become binding.
So when you finish with your taxes today, remember that for every dollar you hand over, the Feds are costing you twice that in regulatory costs. Perhaps we do need a Regulation Day.