Hidden "Taxes" Cost Families 20 Percent Of Income: Study Calls for Congressional Accountability for Cost of Regulation

By CEI Staff [1]

March 29, 1999

Washington, DC, March 30, 1999 — Federal regulations cost taxpayers $737 billion in 1998, an amount equaling 44 percent of the size of all federal outlays of $1.6 trillion, according to a new report released today by the Competitive Enterprise Institute (CEI). The study, Ten Thousand Commandments: An Annual Policymaker’s Snapshot of the Federal Regulatory State, points out that the amount of regulatory state’s annual costs absorbs 9 percent of the US gross domestic product.

"Regulations cost the typical family $7,239 in 1998 – up from $6,800 in 1997," writes Wayne Crews, author of the paper and director of competition and regulation policy at CEI. "That’s 20 percent of the after-tax budget. More is spent on regulation than on medical expenses, food, transportation, recreation, clothing or savings."

The paper points to the risk that new government programs will increasingly be funded by more off-budget regulations as opposed to new taxes or deficit spending. Congress is not held responsible for the cost of these new regulations. Some of the findings of the study include:

Federal Register page counts are the highest they’ve been since Jimmy Carter’s presidency and a 6 percent jump over 1997;

Regulatory costs of $737 billion exceed all U.S. corporate pretax profits, which stood at $640 billion in 1996;

Agencies have issued over 21,000 final rules in the last 5 years;

Of the 4,560 regulations now in the works, 117 are "economically significant" rules that will cost at least $100 million apiece annually;

The Environmental Protection Agency (EPA) expects to issue 462 new rules in the 1998 Federal Register.

"The proper way to police the regulatory state is to treat it the same way the spending state is treated: Congress must be made directly accountable, to the extent possible, for the costs that agency rules inflict on the public," stated Crews. "Maximizing congressional accountability by requiring Congress to vote on agency rules would fulfil citizens’ rights to 'no regulation without representation.'"

CEI is a non-profit, non-partisan research and advocacy institute dedicated to the principles of free markets and limited government. To obtain a copy of the study, contact CEI at 202-331-1010.