Executive Summary – Ten Thousand Commandments 2022
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The Congressional Budget Office’s (CBO) February 2022 Budget and Economic Outlook, covering 2022 to 2032, shows discretionary, entitlement, and interest spending of $6.822 trillion in fiscal year 2021, with ongoing, unprecedented COVID-19–influenced deficits of $2.775 trillion.[1] While spending is projected to decline in fiscal year 2022 and for a short time beyond, the CBO puts outlays beyond the $7 trillion level before the end of the decade. The national debt now stands at a record $30.01 trillion.[2] It was slightly under $20 trillion when Donald Trump took office.
The pandemic alone cannot be blamed for the lack of spending restraint during the Trump administration and since, as even one-time fiscal conservatives appear to have lost the appetite for addressing government overspending. In 2020, they dropped the kite string altogether, enabling skyrocketing expenditures during the coronavirus response. Even before the pandemic, spending on debt service threatened to rival the entire defense budget, and presents a greater threat now as interest rates rise.[3] Meanwhile, relaxation of COVID-19 measures has only escalated policy makers’ magical thinking that government outlays create wealth.
The cost of government extends well beyond what Washington collects in taxes and the far greater amount it spends. Federal environmental, safety and health, social, and economic regulations and interventions affect the economy by hundreds of billions—even trillions—of dollars annually. This situation is compounded by—both sincere and exploitative—responses to crises like the COVID-19 pandemic, the third major economic shock of the century, after the September 11, 2001 terrorist attacks and the 2008 financial crisis.
It is now a familiar pattern. Spending and regulatory interventions undertaken to relieve one economic crisis can become a floor for or even cause of a subsequent one, exacerbating the regulatory state’s propensity for self-preservation and growth.
Unlike on-budget spending, regulatory costs are largely obscured from public view, constituting a hidden tax.[4] As the least disciplined aspect of government activity, regulation can be appealing to lawmakers. Budgetary pressures, which are now mounting, can incentivize lawmakers to impose off-budget regulations on the private sector rather than add to unpopular deficit spending. For example, a government child care program or job training initiative could involve either increasing government spending or imposing new regulations requiring businesses to provide those benefits. The costs are never avoided, merely concealed. Just as firms pass the costs of some taxes along to consumers, regulatory compliance costs and mandates borne by businesses will percolate throughout the economy, finding their way into consumer prices and workers’ wages.[5]
When the U.S. federal administrative state began its march over a century ago, few likely imagined the tangle of rules it would produce, and how those would envelop society and encourage their own replication and self-preservation efforts by those rules’ administrators. Rules and programs have accumulated year after year, decade after decade, with little retrenchment. During Trump’s four years, there had been some unique reversals, such as a slowdown in the issuing of new rules and some rollbacks of existing ones. That agenda has now been reversed by President Joe Biden.
Presidents routinely take steps to freeze and review predecessors’ pending actions to prioritize their own.[6] Early “Regulatory Freeze Pending Review” directives to executive branch agencies were issued by both Trump and Biden.[7] Motives differed, of course. Biden went further in his team’s singling out specific Trump rulemakings for review, with an eye to rolling them back.[8]
As detailed extensively in the 2021 edition of Ten Thousand Commandments, the Trump administration had gone further in its attempt at streamlining internal departmental and agency processes and speeding regulatory approvals for private activities. At the same time, many of Trump’s actions imposed rather than decreased burdens, including trade interventions like tariffs, anti-dumping and “Buy American” agendas, and domestic regulatory interventions.[9] Nevertheless, the extensive executive actions aimed at economic liberalization were both broad-based and specific to sectors such as financial regulation, antiquities and national monuments, offshore resource access, education, health care,[10] agricultural biotechnology, and more.[11]
The liberalizations ended with Biden, who declared them “harmful policies and directives that threaten to frustrate the Federal Government’s ability to confront … problems.”[12] This included the issuing of a directive to departmental and agency heads to “modernize and improve the regulatory review process” in order to ensure it “fully accounts for regulatory benefits that are difficult or impossible to quantify, and does not have harmful anti-regulatory or deregulatory effects.”[13] With this move, the Office of Management and Budget (OMB), which previously was nominally charged with regulatory supervision, has been transformed into a regulatory promoter, amplifier, and initiator. Biden’s “Modernizing Regulatory Review” memorandum replaced what minor regulatory oversight had existed with a mechanism to “promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations.”[14]
Along with the erosion of regulatory oversight, Biden’s executive actions have included federal support of unionization and collective bargaining and reinstatement of Obama-era housing and science policies. In addition, Biden’s “equity” policies regarding race and sex, calling for “bold and ambitious steps to root out inequity from our economy” are embedded in every other aspect of his administration’s agenda.[15] Some of Biden’s directives are noted in Box 1.
Box 1. Prominent Biden Executive Actions Reaffirmed Federal Interventionism in 2021
No matter who is president, and regardless of the makeup of Congress, the federal government increasingly influences society through regulation as well as spending, and increasingly, spending is itself regulatory, having long since replaced what otherwise would have been private functions and duties. While it should be routine for policy makers to track and disclose regulatory costs and perform periodic housecleaning, such accountability and streamlining are the exception rather than the rule, while the limited cost–benefit analysis undertaken by agencies relies largely on agency self-reporting and covers only a fraction of rules.[89] Regulators are reluctant to acknowledge when a rule’s benefits do not justify its costs.[90] In fact, given the current circumstance, in which even the overseers at OMB are directed to regulate rather than police regulation.
The regulatory impulse has been fueled by Congress’ longstanding delegation of its lawmaking power to executive branch regulatory agencies—and by its overbroad assumption of lawmaking power over citizens’ lives in the first instance. Reforms advancing accountability could begin with requiring congressional votes on significant or controversial agency rules before they become binding on the public, thereby getting lawmakers on the record as supporting or opposing specific rules and affirming a principle of “no regulation without representation.”[91]
Other reforms could include annual regulatory transparency report cards, similar to the presentation in Ten Thousand Commandments, to distill information for the public and policy makers about the scope of the regulatory state.[92] While scattered government and private data exist on the numbers of regulations issued by agencies and their costs and effects, the vast sweep of unknown costs of intervention need cataloging to shed light on the unappreciated extent of the federal regulatory enterprise.
This 2022 edition of Ten Thousand Commandments is the latest in an annual series that examines the scope of the federal regulatory state to help illustrate the need for transparency, disclosure, and congressional accountability. This report contains six major elements:
- Highlights in regulatory trends.
- An overview of some of the ways the Biden administration has overturned Trump administration attempts to ease the pace of new regulations and roll back old ones.
- An overview of the scope of the federal regulatory state, including a taxonomy of categories of unmeasured costs of regulation and depictions of its size compared with federal budgetary components and gross domestic product (GDP).
- An analysis of trends in the numbers of rules and regulations issued by agencies, based on information provided in the Federal Register and in “The Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions,” and a brief survey of executive branch memoranda, notices, and other “regulatory dark matter.”
- Recommendations for reform that emphasize disclosure and improving congressional accountability for rulemaking.
- An appendix containing historical tables of regulatory trends over past decades.
For the economic health and stability of a nation confronting inflation, supply-chain disruptions, debt, and other self-inflicted wounds, the regulatory process should be made as transparent as possible and should be brought under greater democratic accountability and constitutional norms. Some highlights from the report follow.
- Overall final rule counts remained historically low at the conclusion of Biden’s first calendar year, with the calendar year count of 3,257 rules containing 105 Trump “midnight” rules among them. However, Trump’s rule counts also contained some deregulatory elements, and Biden’s significant rules in the pipeline appear destined to return to pre-Trump levels, exceeding all Trump years except the last.
- Biden’s repudiation of the Trump deregulatory agenda is thorough. While the Trump administration claimed to have met internal goals of implementing a “one-in, two-out” process for rules and freezing costs, the longer-term horizon revealed resistant agencies poised to unleash substantially more regulatory actions than deregulatory ones. That impulse is now unleashed via Biden’s directives to agencies.
- Biden’s expansion of an equity agenda changes the nature of the debate over the regulatory state.
- Given the limited available federal government data and reports, and contemporary studies—and the federal government’s failure to provide a regularly updated estimate of the aggregate costs of regulation—this report employs a placeholder estimate for regulatory compliance and economic effects of federal intervention of $1.927 trillion annually. It does so for purposes of context and rudimentary comparison with federal spending and other economic metrics. The figure is updated slightly from prior years with OMB Report to Congress editions that became available in 2021 providing some limited cost information for some rules. This report also presents an outline of the sweep of intervention and policies that belong in any tally but for which costs are disregarded and unfathomed.
- Much of the economic and social intervention entailed in pandemic mitigation measures and in the Biden spending agenda will never show up as costs of regulation in the formats that purport to address or score them, the Report to Congress on Regulatory Benefits and Costs and the Unified Agenda. Both already provide only partial overviews and are chronically late besides.
- Federal spending topped $6.5 trillion in 2020, then surged to $6.822 trillion in 2021 with COVID-related spending and bailout efforts. These federal outlays are projected to reach $5.872 trillion in fiscal year (FY) 2022. The burden of regulatory regulation is equivalent to 33 percent of these projected federal outlays.
- Regulatory costs of $1.927 trillion amount to 8 percent of U.S. gross domestic product, which was estimated at $23.99 trillion for 2021 by the Commerce Department’s Bureau of Economic Analysis.
- When regulatory costs are combined with federal outlays of $6.822 trillion in 2021, the federal government’s share of the entire economy reached at least 36 percent (30 percent is the typical figure; state and local spending and regulation would add to these).
- If it were a country, U.S. regulation would be the world’s eighth-largest economy (not counting the United States itself), ranking behind France and ahead of Italy.
- The regulatory hidden “tax” exceeds individual income taxes, estimated at $1.705 trillion for 2021. It rivals individual and corporate federal income tax receipts combined, estimated at $1.973 trillion in 2021 ($1.707 trillion in individual income tax revenues and $268 billion in corporate income tax revenues).
- Regulatory costs rival corporate pretax profits of $2.18 trillion.
- If one assumed that all costs of federal regulation flowed all the way down to households (131 million “consumer units”), U.S. households would “pay” $14,684 annually on average in a hidden regulatory tax. That amounts to 17 percent of the average pretax income of $84,352 and 24 percent of the average expenditure budget of $61,334. The regulatory “tax” exceeds every item in the household budget except housing. That means that a typical American household “spends” more on embedded regulation than on health care, food, transportation, entertainment, apparel, services, or savings.
- Trump’s total of 2,964 final rules in 2019 was the lowest count since records began being kept in the 1970s and is the only tally below 3,000. (In the 1990s and early 2000s, rule counts regularly exceeded 4,000 annually.) An additional 202 Trump administration rules were added between New Year’s Day 2021 and Biden’s inauguration.
- A subset of rules are deemed “significant,” of which there were 387 in calendar year 2021, compared to 462 in 2020 (some deregulatory). Trump’s three other years produced record-low levels of significant rules, so Biden’s return to pre-Trump levels will bear watching.
- During calendar year 2021, while agencies issued those 3,257 rules (some of them deregulatory), Congress enacted “only” 143 laws. Thus, agencies issued 23 rules for every law enacted by Congress. This “Unconstitutionality Index”—the ratio of regulations issued by agencies to laws passed by Congress and signed by the president—highlights the entrenched delegation of lawmaking power to unelected agency officials. The average ratio over the past 10 years is 26.
- In 2017, Trump’s first year, the Federal Register finished at 61,308 pages, the lowest count since 1993 and a 36 percent drop from President Barack Obama’s 95,894 pages, which at the time was the highest level in history.
- The 2021 Federal Register contained 74,532 pages, dropping from 86,356 pages in 2020, which stands as the second-highest count ever. However, Trump’s rollbacks of rules—and historically there are still fewer rules overall—also necessarily add to rather than subtract from the Register. All other Trump years were below Biden’s count. Biden’s count may drop slightly as the National Archives adjusts the Federal Register for skips and blanks.
- Since 1993, when the first edition of Ten Thousand Commandments was published, agencies have issued 114,821 final rules (this does not include guidance documents). Since the Federal Register first began itemizing them in 1976, 211,911 final rules have been issued.
- Of 95,848 final rules issued since the Congressional Review Act passed in 1996 under President Bill Clinton, revocations of just 20 rules have occurred, including one guidance document not published in the Federal Register.
- The Weidenbaum Center at Washington University in St. Louis and the George Washington University Regulatory Studies Center in Washington, D.C., jointly estimate that agencies spent $78 billion in fiscal year 2020 to administer and police the federal administrative apparatus. These amounts are embedded in the federal budget, so are separate from compliance, economic, and other burdens of federal intervention.
- At the end of calendar year 2021, 2,094 proposed rules had been published in the Federal Register, 272 of them deemed significant, which the federal government defines as those rules having annual economic effects of $100 million or more. The 2,149 proposed rules issued in 2020 was Trump’s highest count, while Trump’s 1,834 in 2017 was the all-time low. Obama’s lowest count was 2,013 in 2009, his first year in office.
- Alongside the 3,257 rules finalized in calendar year 2021, there is also the flow in the pipeline itself to consider. According to the fall 2021 Unified Agenda of Federal Regulatory and Deregulatory Actions, 68 federal departments, agencies, and commissions have 3,777 regulatory actions in the pipeline at various stages of implementation (recently completed, active, and long-term stages), as follows:
- 2,678 rules in the active phase
- 475 completed rules
- 624 long-term rules
- By contrast, Trump had a higher count of 3,852 rules, but 653 of them had been deemed “deregulatory” via Trump’s since-repealed Executive Order 13771 for a lower “net.” The breakdown was as follows:
- 2,636 rules in the active phase, 496 deemed deregulatory
- 630 completed rules, 101 deemed deregulatory
- 586 long-term rules, 56 deemed deregulatory
- Of the 3,777 regulations in the 2021 Agenda’s pipeline (completed, active, and long-term stages), 295 are “economically significant” rules. Of 261 economically significant rules in 2020 under Trump, 36 had been deemed deregulatory (14 just completed, 20 active, and two long-term).
- The Biden administration’s spring and fall 2021 editions of the Unified Agenda of Regulatory and Deregulatory Actions contained a combined 105 completed “economically significant” rules. The count was 97 in 2020 under Trump, with 21 of those deeded deregulatory. The yearly average for Barack Obama’s eight years was 69; George W. Bush’s average over his term was 49. Trump’s average was 72, but his Agendas are the first and only to contain rules expressly designated deregulatory.
- During calendar year 2021, the Government Accountability Office (GAO) noted 98 finalized “major” rules—a category similar to but broader than the economically significant tally in the Unified Agenda. President George W. Bush’s administration averaged 61 major rules annually in eight calendar years. President Obama’s administration averaged 84. Obama’s eight years accounted for 675 major rules, compared with Bush’s 492. Trump’s four-year total was 343 for an average of 86, but a significant portion were deemed deregulatory. (These tallies emphasize calendar year, and therefore ignore pre-inauguration days attributable to a predecessor in transition years. They also reflect retroactive changes that have occurred in GAO’s online database.)
- Of the 3,777 rules and regulations in the fall 2021 pipeline, 693 affect small businesses, up from 635 under Trump, of which 83 had been deemed deregulatory. Of Biden’s 693, 354 required a Regulatory Flexibility Analysis, which is an official assessment of small-business impacts. An additional 339 were otherwise noted by agencies to affect small businesses in some fashion.
- The five most active rule-producing executive branch entities—the Departments of the Interior, the Treasury, Transportation, Commerce, and Health and Human Services—account for 1,528 rules, or 40 percent of all rules in the Unified Agenda pipeline. The top five most active independent agencies account for another 341 rules.
- Biden issued 77 executive orders in 2021; Trump issued 16 before Biden’s inauguration, for a total of 93. For comparison, President Trump issued 69 executive orders in 2020. (Trump had issued 47 E.O.s in 2017, 35 in 2018, and 63 in 2019).
- From the nation’s founding through 2021, more than 15,582 executive orders have been issued (numbering of them is a more recent phenomenon). President Obama issued a total of 276, similar to President George W. Bush’s 291. Before the 20th century, most presidents had issued no more than a few dozen. In contrast, Woodrow Wilson issued 1,803, Calvin Coolidge issued 1,204, and Franklin D. Roosevelt issued 3,467.
- There were 31 presidential memoranda that appeared in the Federal Register database in 2021, 26 of which were from Biden, and five from Trump. This compares to 59 from Trump in 2020 (after having issued 26, 30, and 38 from 2017–2019, respectively).
- George W. Bush issued 131 memoranda during his presidency that were published in the Federal Register, Barack Obama issued 257, and Trump 152.
- Public notices in the Federal Register normally exceed 21,000 annually, with uncounted guidance documents and other proclamations with potential regulatory effect among them (other guidance documents are issued that do not appear in the Register at all). In 2021, 21,985 notices were issued based on the Federal Register database, compared to 22,480 in 2020. There have been 661,090 public notices since 1994 and over 1 million since the 1970s.