Laws Gone Wild? Drowning in Regulation
According to a forthcoming report by the Competitive Enterprise Institute called Tip of the Costberg, the cost of compliance with federal agency-written regulations stands at $1.806 trillion—and that's just through the first half of this year. It's the equivalent of 50% of the entire $3.6 trillion federal budget for all of fiscal 2012, which ends in September.
The report is CEI's first attempt to hazard its own guess at the high cost of regulation, and follows its recently issued annual report on the matter, Ten Thousand Commandments, which bases its numbers on estimates done every few years by the Small Business Administration. CEI has compiled a report on the regulatory price tag for nearly 20 years.
"If you're not looking at the cost of regulation, you're missing the bulk of the federal government's impact on the economy," says Wayne Crews, vice president for policy at the CEI, and author of both reports.
Though he commends efforts by the Obama administration to streamline some of the rules, Crews says the $10 billion in savings over five years that were identified by the executive branch are "puny" compared with the overall price tag. Indeed, SBA's most recent estimate of the regulatory burden showed a 60% increase in costs from its previous tabulation.
Crews's recommendation? Better disclosure of the economic costs of rules, and congressional approval of any rules that impose a $100 million or more burden on business.