Last year, the Obama Office of Management and Budget’s 2012 Draft Report to Congress on the Benefits and Costs of Federal Regulations surveyed 10 years of regulatory costs and benefits and pegged the cumulative costs of 106 selected major regulations during 2001-2011 at between $43 billion and $67 billion. Meanwhile, the estimated range for benefits spanned from $141 billion to $701 billion.
OMB just released the new 2013 Draft Report to Congress on the Benefits and Costs of Federal Regulations, and the burdens are increasing.
Consider just the past two years:
2012 Report: 12 rules were issued with benefits of between $34.3 billion to $89.5 billion annually, and costs of between $5.0 billion to $10.1 billion
2013 Report: 14 rules were issued with benefits of $53.2 billion to $114.6 billion annually, and costs of between $14.8 billion to $19.5 billion.
Observe the high cost estimates for each year; the Obama administration’s acknowledged new regulatory costs nearly doubled from $10.1 billion in 2012 to $19.5 billion annually in 2013.
This is significant; Recall the 2012 State of the Union Address when Obama wisecracked that he got rid of a regulation that classified spilled milk as an “oil.”
He further boasted:
In fact, I’ve approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his. (paused for applause.) I’ve ordered every federal agency to eliminate rules that don’t make sense. We’ve already announced over 500 reforms, and just a fraction of them will save business and citizens more than $10 billion over the next five years.
That meager $10 billion in cost savings over five years, worthy somehow of the State of the Union, yet in reality a tiny sliver of the real regulatory burden of $1.8 trillion annually, was just swamped in one year in the new Report to Congress.
OMB’s cost-benefit breakdowns incorporate only benefits and costs that agencies or OMB have expressed in quantitative and monetary terms, omitting numerous categories and cost levels of rules altogether. There are far more rules, and far more costs, in reality. Costs of rules from independent agencies are entirely absent in this report for example. Cost-benefit analyses are also sensitive to basic assumptions about how regulations translate into benefits.
The federal government doesn’t tell us what we need to know about regulation, but what it’s owning up to points in the wrong direction.