Federal Regulations Take $1.8 Trillion Bite Out of US Economy

WASHINGTON, April 29 –  Today, the Competitive Enterprise Institute (CEI) released its annual Ten Thousand Commandments report on the size and scope of federal regulations by CEI Vice President for Policy Clyde Wayne Crews Jr. According to the report, federal regulations took a $1.863 trillion bite out of the U.S. economy in 2013. The report aims to establish a baseline for the largely unknown “hidden tax” of the U.S. regulatory state, since more than 99 percent of federal regulations are never subjected to cost-benefit analysis.

“Federal agencies crank out thousands of new regulations every year, but we have little information on the cost or effectiveness of most of them,” said Crews. “There is little transparency and no reliable source of information on exactly what benefits rules are supposed to be generating or if they are serving their intended purpose.”

“Federal regulations cost American businesses, entrepreneurs, and consumers hundreds of billions – perhaps trillions – of dollars annually,” said Crews. “Most of the country is focused on our spending and debt problem, but unless we also address our nation’s regulatory burden, our economy will remain under water. When compared to federal spending, the cost of federal regulations was more than half the size of the federal government’s 2013 budget of $3.5 trillion, and this is part of what is holding back American innovation and wealth creation.”

“The regulatory state wasn’t small before, but it has grown at an alarming rate during the Obama administration,” Crews added. “The president has said publicly he will not wait for Congress to pass legislation because he has a ‘pen’ and a ‘phone.’ This means the administration aims to implement policy through regulation, which will add a hidden tax on every form of commerce and trickle down to all consumers.”

Highlights from the 2014 edition of Ten Thousand Commandments include:

• This is the 21st edition of Ten Thousand Commandments. In that time, 87,282 final rules have been issued. That’s more than 3,500 per year or about nine per day.
• Compliance costs and economic impacts of federal regulations reached $1.863 trillion in 2013. That is larger than the entire economy of some countries, including Canada or Australia.
• There were 51 rules for every law in 2013. This “Unconstitutionality Index” is the ratio of regulations issued by agencies compared to legislation passed by Congress and signed into law by the president. There were 72 new laws, but 3,659 new rules. A new rule every 2 ½ hours.
• Regulatory costs amount to an average of $14,974 per household – 23 percent of the average household income of $65,596 and 29 percent of the expenditure budget of $51,442. This exceeds every item in the household budget except housing – more than health care, food, transportation, entertainment, apparel, services and savings. Some 63 departments, agencies and commissions have regulations in the pipeline.
• The 2013 Federal Register contains 79,311 pages, the fourth highest ever. The top two all-time totals are 81,405 pages in 2010 and 81,247 in 2011, both under President Obama.

> View CEI’s 2014 report, “Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State”

> See also: Reining in the Executive Branch Bureaucracy, Part 1: Measure Regulatory Costs