This is Part 4 of a series taking a walk through some sections of Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State (2014 Edition).
America hovers at $3.5 trillion in annual spending now and a projected $4 trillion by 2016. After nearly three decades of deficit spending since the 1960s, the federal government had temporarily balanced the budget from FY 1998 through FY 2001. (The total surplus was $128 billion in FY 2001.)
Those surpluses are history. So too are the days when a $2 trillion federal budget was regarded as high.
Regulations, the costs of federal requirements the citizenry is compelled to bear, themselves constitute a form of off-budget “spending.” Therefore viewing outlays, regulation and the deficit at one glance is instructive.
As shown nearby, in FY 2013, a deficit of $680 billion was posted on $3.454 trillion in outlays. There is no budget balance, let alone surplus, projected over the coming decade. In fact, the smallest deficit projected is an optimistic $478 billion in 2015, after which it streaks north again.
Note, in the center column, that estimated regulatory “costberg” compliance costs of $1.863 trillion exceed half the 2013 level of fiscal budget outlays. Regulatory compliance is twice the 2013 deficit.
Contemplating off-budget regulatory compliance costs equivalent to half of all federal outlays is sobering enough, but the situation is more dramatic in Washington’s high-spending culture of perpetual deficits.
Higher spending itself can translate into even higher future regulatory costs. Spending related to bailouts and such stimulus as infrastructure and the like will include significant regulatory components as well–for example, salary cap proposals with respect to bank bailouts, and reconstituted net neutrality proposals with respect to telecommunications infrastructure spending and more.
Deficits totaling hundreds of billions and regulatory costs exceeding $1.8 trillion dwarf the initial $150 billion “stimulus package” of early 2008, which comprised the tax rebates that were naively thought capable of resurrecting the economy at that time.
It wouldn’t hurt to reflect upon how the spending and deficit culture leads to growth in off-budget regulation.
Because far larger stimulus spending packages have not increased employment, economic liberalization and a reduced regulatory state deserve renewed consideration.