While we know rather precisely how much the federal government collects from us in taxes, the extent of regulatory compliance costs imposed on the public is quite a different matter. While a third party estimate pegs costs at $677 billion — more than the GNP of Canada — there is no official tracking of regulatory costs.
Congress is free to enact legislation it considers beneficial with little regard for the regulatory burdens that will result. Agencies that impose implementing regulations are unaccountable to the voting public, creating a disconnect between lawmaking power and responsibility, fostering “regulation without representation” as a deliberate public policy. Instead, reforms should ensure that regulatory costs are officially acknowledged, and that Congress is directly accountable for those costs at the ballot box.
Though official estimates do not yet exist, here are a few facts about the regulatory state described in the 1996 edition of “Ten Thousand Commandments”
- Regulation costs more than $1/2 trillion annually
- Regulatory costs are triple the deficit, and one-third the level of federal outlays
- Regulatory costs consume 19 percent of a household’s after-tax budget.
- The Federal Register exceeds 67,000 pages annually.
- Budgets and staffing of federal agencies enforcing regulations are at record levels.
- There are more than 4,500 new rules in the pipeline.
- Regulators expect to impose new rules costing at least $11.6 billion annually this year.
- Regulatory costs for small firms are nearly double the costs for large firms.
- New rules affecting small business increased seven percent under President Clinton.
- EPA provided benefit estimates for only 30 percent of its planned major rules.
- OMB in 1994 reviewed 135 “economically significant” rules, a 32% increase over 1993.
The goal of this report is to make future editions unnecessary by encouraging Congress to track its own regulatory escapades. In the short term, Congress could require that publicly available data, such as that accumulated in this report, should be consolidated and presented annually as a chapter in the fiscal budget. Though imprecise, such data will make the extent of the regulatory burden more explicit for policymakers and scholars.
For example, five-year historical tables summarizing total major and minor rules issued by agencies, along with numbers and costs (where available) of those rules would be especially valuable.
Another part of the solution is to make regulatory costs as transparent as taxes through a limited form of regulatory budget, such as one requiring Congress to estimate, and set a ceiling for, the costs of new mandates at the time they are passed. The Office of Management and Budget could certify that the budget is not exceeded as rules are implemented.
Finally, Congress, not unaccountable agencies, must bear direct responsibility for every dollar of regulatory costs imposed on the public. Ideally, Congress should be required to vote its approval of every major agency regulation before these are binding on the public, thus ending “regulation without representation.” Topping these reforms off with a Regulatory Reduction Commission to reduce the existing $677 billion regulatory burden would finally create a genuinely accountable regulatory system.