Ten Thousand Commandments - An Annual Snapshot of the Federal Regulatory State - Competitive Enterprise ...
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Ten Thousand Commandments
An Annual Snapshot
of the Federal Regulatory State
2018 Edition
by Clyde Wayne Crews, Jr.
Executive Summary
Spending and deficit restraint are vital to the ing growth and prosperity. The costs of such
nation’s economic health. But the cost of rules and mandates accumulate throughout
government extends beyond what Washington the economy. This report is the latest in an
collects in taxes and what it spends. Federal annual series that examines the scope of the
environmental, safety and health, and federal regulatory state.2
economic regulations affect the economy
by hundreds of billions—even trillions— When the U.S. federal administrative state
of dollars annually. Budgetary pressures can began its growth a century ago, few likely
incentivize lawmakers to impose off-budget imagined the tangle of rules it would yield
regulations on the private sector rather than and how they would envelop the economy
add to unpopular deficit spending. and society. Over several decades, the federal
regulatory state has continued to grow, as
Federal regulatory burdens can operate as rules accumulate year after year with little
a hidden tax.1 Unlike on-budget spend- retrenchment. Over the past year, there were
ing, regulatory costs are largely hidden from some hopeful signs in this regard, but there
public view. This can make regulation overly are still reasons for concern.
attractive to lawmakers. For example, a new
government job-training initiative could One of the first acts of President Donald
involve either increased government spend- Trump’s administration was to issue a memo-
ing or new regulations that require busi- randum to executive branch agencies titled
nesses to provide such training. Just as firms “Regulatory Freeze Pending Review.”3 This
generally pass the costs of some taxes along is a routine move taken by new presidents
to consumers, some regulatory compliance wishing to review their predecessor’s pend-
costs borne by businesses will find their way ing actions and to prioritize their own, but it
into the prices that consumers pay, affect- was exceeded by Trump’s broader streamlining
ing the wages that workers earn and hinder- actions.4 While some of Trump’s executive ac-
Crews: Ten Thousand Commandments 2018 1Box 1. Trump Executive Actions on Regulatory Process Reform
• Presidential Memorandum. Streamlining Permitting • Executive Order 13792. Review of Designations under
and Reducing Regulatory Burdens for Domestic Manu- the Antiquities Act, April 26, 2017.21
facturing, January 24, 2017.12 • Executive Order 13795. Implementing an America-First
• Executive Order 13766. Expediting Environmental Offshore Energy Strategy, April 28, 2017.22
Reviews and Approvals for High Priority Infrastructure • Executive Order 13807. Establishing Discipline and
Projects, January 24, 2017.13 Accountability in the Environmental Review and Per-
• Executive Order 13771. Reducing Regulation and mitting Process for Infrastructure Projects, August 15,
Controlling Regulatory Costs, January 30, 2017.14 2017.23
• Executive Order 13772. Core Principles for Regulating • Executive Order 13813. Promoting Healthcare Choice
the United States Financial System, February 3, 2017.15 and Competition across the United States, October 12,
• Executive Order 13777. Enforcing the Regulatory 2017.24
Reform Agenda, February 24, 2017.16 • Executive Order 13821. Streamlining and Expedit-
• Executive Order 13781. Comprehensive Plan for Re- ing Requests to Locate Broadband Facilities in Rural
organizing the Executive Branch, March 13, 2017.17 America, January 8, 2018.25
• Executive Order 13789. Identifying and Reducing Tax • Presidential Memorandum. Memorandum for the
Regulatory Burdens, April 21, 2017.18 Secretary of the Interior: Supporting Broadband Tower
• Executive Order 13790. Promoting Agriculture and Facilities in Rural America on Federal Properties Man-
Rural Prosperity in America, April 25, 2017.19 aged by the Department of the Interior, January 8,
• Executive Order 13791. Enforcing Statutory Prohibi- 2018.26
tions on Federal Control of Education, April 26, 2017.20
tions worryingly seem overly concerned with regulatory costs should be closely tracked
trade restrictions, anti-dumping and “buying and disclosed annually, and periodic house-
American,” the president also issued a series cleaning should be performed. The limited
of actions related to reforming the regulatory cost-benefit analysis currently undertaken by
process in general, liberalizing specific sectors, agencies covers only a fraction of rules.10 Fur-
and even reforming the executive branch itself thermore, cost-benefit analysis relies largely on
(see Box 1).5 agency self-reporting. Regulators are reluctant
to acknowledge when a rule’s benefits do not
For context, consider the level of federal justify its costs. In fact, one could expect agen-
spending. In February 2018, the White cies to devise new and suspect categories of
House budget proposal reported that outlays benefits to justify agency rulemaking activity
for fiscal year (FY) 2017 stood at $3.981 tril- and new endeavors.11
lion and are estimated to reach $4.173 tril-
lion in FY 2018.6 The president’s new budget The problem of overregulation is largely
projects annual spending to top $5 trillion driven by entrenched delegation of rule-
in 2023. Similarly, the Congressional Budget making power to agencies by Congress.
Office’s 2018 Budget and Economic Outlook Addressing overregulation effectively
report—which was delayed owing to the tax and over the long term will require expe-
reform legislation of late 20177—projects dis- dited congressional votes on significant
cretionary, entitlement, and interest spending or controversial agency rules before they
to surpass $4.1 trillion in FY 2018 and to top become binding. Getting lawmakers to
$7 trillion by FY 2028.8 Meanwhile, the na- go on the record as supporting or oppos-
tional debt now stands at $20.8 trillion.9 ing specific rules would reestablish con-
gressional accountability and affirm the
Since government heavily influences soci- sound principle of “no regulation without
ety through regulation as well as spending, representation.”
2 Crews: Ten Thousand Commandments 2018Federal regulatory transparency report • If it were a country, U.S. regulation
cards, similar to the presentation in Ten would be the world’s eighth-largest
Thousand Commandments, could be issued economy, ranking behind India and
each year to distill information for the pub- ahead of Italy.
lic and policy makers about the scope of • The regulatory hidden tax is equivalent
the regulatory state.27 Scattered government to federal individual and corporate in-
and private data exist about the number come tax receipts combined, which total
of regulations issued by agencies and their an estimated $1.884 trillion in 2017
costs and effects. Compiling some of that ($1.587 trillion in individual income tax
information can shed light on the scope of revenues; and $297 billion in corporate
the federal regulatory enterprise. That goal income tax revenues).
is central to the annual Ten Thousand Com- • Regulatory costs rival 2016 corporate
mandments report. pretax profits of $2.156 trillion.
• If all costs of federal regulation and
Although challenging, it is worthwhile to intervention flowed down to U.S.
try to get some sense of the substantial costs households, each would “pay” $14,666
of the regulatory state. For the good of the annually on average in a regulatory
nation’s economic health and the welfare of hidden tax. That amounts to 20 percent
people as both citizens and consumers, Con- of the average household pretax income
gress should strive to make the regulatory of $74,664 and 26 percent of the
process more transparent and to bring it un- average household expenditure budget
der democratic and constitutional control. of $57,311. The regulatory “tax” exceeds Regulators are
every item in the household budget
Highlights of the current edition include the except housing. More is “spent” on reluctant to
following: embedded regulation than on health
care, food, transportation, entertainment, acknowledge
• The estimate for regulatory compliance apparel, services, and savings.
and economic effects of federal • The Weidenbaum Center at Washington when a rule’s
intervention is $1.9 trillion annually
for purposes of comparison with federal
University in St. Louis and the George
Washington University Regulatory
benefits do not
spending and other economic metrics. Studies Center in Washington, D.C., justify its costs.
This estimate was compiled using jointly estimate that agencies spent $66
available federal government data and billion in fiscal year 2017 to administer
reports, in context with contemporary and police the federal regulatory state.
studies. This on-budget amount is in addition to
• The estimated burden of regulation is compliance and economic burdens.
equivalent to nearly half the level of • Apart from sector-specific executive
federal spending, expected to be $4.1 orders and memoranda, there are six
trillion in 2018. ways the Trump administration has so
• Regulatory costs of $1.9 trillion far addressed regulatory streamlining:
amount to 10 percent of the U.S. gross –– Elimination of 15 existing rules via
domestic product, which was estimated the Congressional Review Act;
at $19.738 trillion in 2017 by the –– Delay or withdrawal of 1,579 of
Commerce Department’s Bureau of Obama administration rules in the
Economic Analysis. pipeline;
• When regulatory costs are combined –– Multipronged streamlining for pipe-
with estimated federal FY 2018 outlays of lines, bridges, 5G broadband, rural
$4.173 trillion, the federal government’s broadband, and other infrastructure;
share of the entire economy reaches 30 –– Imposition of restraint on agencies
percent (not including state and local regarding initiating large, significant
spending and regulation). rulemakings;
Crews: Ten Thousand Commandments 2018 3–– Early progress on the presidential re- tive,” and “Long-term” stages), according
quirement that agencies eliminate at to the fall 2017 “Regulatory Plan and
least two rules for every one issued; the Unified Agenda of Federal Regula-
–– Steps toward addressing regulating tory and Deregulatory Actions.” Of the
through agency guidance documents 3,209 rules in the Agenda, 540 are “De-
and other sub-regulatory decrees. regulatory” for Executive Order 13771
• While the Trump administration has purposes, broken down as follows:
technically met Executive Order 13771’s –– 1,977 rules in active phase, 448
(“Reducing Regulation and Controlling deemed deregulatory.
Regulatory Costs”) goal of implementing –– 470 completed rules, 62 deemed
a “one-in, two-out” process for federal deregulatory.
regulations, agencies are already on track –– 762 long-term rules, 30 deemed
to reverse this, poised to issue over three deregulatory.
times more regulatory than deregulatory • Of the 3,209 regulations in the pipe-
actions. line (completed, active, and long-
• The Federal Register finished 2017 at term stages), 140 are “economically
While the Trump 61,308 pages, the lowest count since significant” rules, which the federal
1993. This represents a 36 percent drop government describes as having an-
administration has from President Barack Obama’s 95,894 nual economic effects of $100 million
technically met pages in 2016, the highest level ever
recorded.
or more. Of those 140, 30 are deemed
deregulatory for purposes of Executive
Executive Order • Federal Register pages devoted specifically Order 13771 (five at the completed
to final rules in 2017 stood at 18,727, stage, 25 at the active stage.) However,
13771’s goal of the lowest since 1995. none of the planned long-term rules are
• The 2017 Federal Register contained deregulatory.
implementing 3,281 completed or final rules, • Since 1993, when the first edition of
compared with 3,853 final rules the Ten Thousand Commandments was
a “one-in, two- year before under Obama, a 15 percent published, agencies have issued 101,380
out” process for reduction. In the 1990s and early 2000s,
rule counts regularly exceeded 4,000
rules. Since the Federal Register first
began itemizing them in 1976, there
federal regulations, annually. have been 198,470 rules.
• At the end of calendar year, 1,834 • The Trump administration’s spring and
agencies are proposed rules were in the Federal fall Unified Agenda of Federal Regula-
Register pipeline. This was a 24 percent tory and Deregulatory Actions contained
already on track reduction from 2,419 in 2016. a combined 68 completed economically
• During calendar-year 2017, while significant rules. The annual average
to reverse this. agencies issued those 3,281 rules, for Barack Obama’s eight years was 69;
Congress enacted “only” 97 laws. George W. Bush’s average over his term
Thus, agencies issued 34 rules for was 49. Trump’s Agendas are the first to
every law enacted by Congress. This contain expressly deregulatory rules for
“Unconstitutionality Index”—the ratio purposes of Executive Order 13771.
of regulations issued by agencies to laws • In the first year of the Trump adminis-
passed by Congress and signed by the tration, the Government Accountability
president—highlights the entrenched Office issued 48 reports on “major”
delegation of lawmaking power to rules (a category similar to economically
unelected agency officials. The ratio significant) as required by the Congres-
was 18 in 2016; the average for the past sional Review Act. President George W.
decade has been 28. Bush’s administration averaged 63 major
• In the pipeline now, 67 federal depart- rules annually during his eight years in
ments, agencies, and commissions have office. President Barack Obama aver-
3,209 regulatory actions at various stages aged 86, or a 36 percent higher average
of implementation (“Completed,” “Ac- annual output than Bush. Obama issued
4 Crews: Ten Thousand Commandments 2018685 major rules during his term com- through President Barack Obama, more
pared with Bush’s 505. than 15,285 executive orders have been
• Of the 3,209 regulations now in the issued. Obama issued a total of 276,
works, 590 affect small businesses, down similar to President George W. Bush’s
from 671 in fall 2016. Of those, 337 291.
required a Regulatory Flexibility Analy- • Trump issued 38 presidential
sis (assessing small-business impacts), memoranda in 2017. President George
down from 412 in 2016. An additional W. Bush published 131 memoranda
253 were otherwise noted by agencies to in the Federal Register over his entire
affect small businesses in some fashion. presidency, whereas Obama published
Overall, 83 were deregulatory. 257.
• The five most active rule-producing • Public notices in the Federal Register nor-
entities—the Departments of Com- mally exceed 24,000 annually, including
merce, Defense, Transportation, and the uncounted guidance documents and
Treasury and the Environmental Protec- other proclamations with potential regu-
tion Agency—account for 1,359 rules, latory effect. A total of 22,137 notices
or 43 percent of all rules in the Unified were issued in 2017, 572,626 have been
Agenda pipeline. issued since 1994, and well over a mil-
• Trump issued 63 executive orders in lion since the 1970s.
2017. From the nation’s founding
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