Desperately Seeking Regulatory Restraint

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Our friends at the Wall Street Journal editorial board recently published a timely warning about the surge in federal regulation being pushed by the Biden administration. They open with this statement: “If you thought the GOP takeover of the House means gridlock in Washington prevails, think again. Rule by regulation is accelerating and the only check will be the courts.”

Just so far in President Biden’s first term in office, we’ve seen 517 regulatory actions with some $318 billion in total costs. The Journal editors point out that at the same point in his administration, President Obama had only imposed rules with a cost of $208 billion. Across four years, President Trump imposed rules costing just $64.7 billion. These numbers come to us, by the way, from the analysts at the American Action Forum.

The WSJ editorial also cites my own distinguished colleague Wayne Crews, who has been publishing estimates of federal regulatory costs for over almost 30 years – he was our guest on Episode 3. According to Wayne, total regulatory costs are around $2 trillion a year, roughly 8% of the entire gross domestic product of the United States in 2021. If the cost of regulation were a tax, it would be larger than the federal income tax and come out to almost $15,000 per family. If the cost of U.S. regulation were a country, it would rank just behind France’s GDP in size.

And there’s more in store. Twice a year, federal agencies publish lists of the rules they’re working and planning to write in a document called the Unified Agenda. Rules currently in the works cover everything from reducing student loan payments to banning menthol cigarettes. By a recent count, another 311 proposed rules are in the pipeline and would cost an additional $191 billion when final. Twenty-three of those rules will cost over $1 billion each.

Given the current split control of Congress we’re unlikely to get much relief from all of this via the legislative branch of government, so the only real check is likely to be through lawsuits challenging some of these rules in the courts. The Supreme Court’s decision in West Virginia v. EPA last year means agencies can no longer grant themselves new powers to address what the court calls “major questions” – they need a clear grant of authority from Congress to take on new authority. That change alone, if majorities on the court apply it consistently, should swat down several of the worst new rules, including the Securities and Exchange Commission’s climate disclosure rule, currently awaiting a final version, and the Federal Trade Commission’s new ban on non-compete clauses for 30 million workers.

We also covered this topic on Episode 11 of the Free the Economy podcast (regulation segment starts around 0:57).