Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
Although Americans spend hundreds of billions of dollars every year to comply with federal environmental, safety and economic regulations, detailed, formal official accountings for regulatory costs rarely exist. What regulatory discipline that does exist primarily relies on the good faith of agencies to voluntarily disclose the costs of their regulations – rarely on a requirement that they do so. The dilemma: Unlike when the government taxes or borrows to carry out its ends, regulatory costs imposed by Uncle Sam are off-budget and thus out of control.
The true scope and cost of federal regulations is unknown, but a review of available government and independent data paints a sobering picture.
Regulatory costs dwarf the federal deficit: Off-budget regulations cost $688 billion in 1997. That’s 20 times the $34 billion federal deficit, and over 40 percent the size of the entire federal budget.
Regulations cost the typical family $6,875 in 1997: The average family’s after-tax budget of $36,423 contains embedded regulatory costs of $6,875 — 19 percent of the after-tax budget.
The 1996 Federal Register contained 64,591 pages: This is the second-highest page count over the past ten years.
Agencies issued 4,937 final rules in 1996’s Federal Register, the greatest number since 1984.
Agencies have issued 45,783 final rules over the past ten years.
New regulations to impose at least $12.5 billion yearly in future off-budget costs are in the pipeline: Of the 4,407 regulations now in the works, 125 are "economically significant" rules that will cost at least $100 million apiece annually.
New rules affecting small businesses have increased 10 percent since 1993.
The Environmental Protection Agency alone expects to issue 430 of the 4,407 planned rules.
EPA’s rules alone will cost at least $3.6 billion annually.
EPA provided benefit estimates for fewer than half of its planned major rules.
"Rubber Stamp" audits: Although regulations proceed unabated, the Office of Management and Budget reviews just one-quarter the number it did three years ago.
Controlling regulatory costs assumes renewed importance in an environment in which deficit cutting and budget balancing dominate. If Congress must fund new programs either by increasing the deficit or by issuing new regulations, a balanced budget ethos will impel Congress to increase private sector regulatory burdens as an alternative to spending money it does not have. That’s a risky situation: We at least can know with certainty the size of the deficit. The actual scope of the total regulatory burden remains a mystery.
The most important element of controlling the existing $688 billion regulatory state is to make Congress directly accountable for every dollar of costs unelected agencies impose on the public. Regardless of the precision with which we may someday ascertain regulatory costs, congressional approval -- rather than agency approval -- of regulations and regulatory costs is the ultimate realization of accountability to the public. That means requiring Congress to vote approval of agencies’ final rules. Congressional accountability would fulfill citizens’ right to demand "No regulation without representation."