The twentieth anniversary edition of Ten Thousand Commandments was released this week. The annual report gives a big-picture overview of the federal regulatory state. Author Wayne Crews discusses his main findings, how he started Ten Thousand Commandments, how the regulatory state has evolved over the last 20 years, and what the future holds for regulation.
The Patient Protection and Affordable Care Act (Obamacare) bans health insurers from denying people coverage if they have certain pre-existing medical conditions. A regulation partially implementing that policy appeared in today’s Federal Register. It is the first “economically significant” regulation ($100 million or more in annual economic impact) to appear since April 18. This interim final rule extends the Pre-Existing Condition Insurance Plan (PCIP) program through 2014.
How much does it cost? The analysis accompanying the rule is vague. It does say that the Health and Human Services Department “is authorized to disperse $5 billion to pay claims and the administrative costs of the PCIP program that are in excess of premiums collected from enrollees.” Essentially, if insurers and providers are required to take losses on some of their patients, Washington has agreed to subsidize some of the difference with taxpayer dollars.
Since this is government spending, I won’t include this $5 billion in my running tally of compliance costs for this year’s economically significant rules (currently ranging from $5.58 billion to $10.19 billion, as of the most recent Battered Business Bureau post).
The rule acknowledges administrative costs, but claims they will be minimal since they build on existing systems. It gives no numbers.
The cost analysis also states, “With respect to other parties, we lack data with which to quantify costs associated with this regulation.” Since the bread and butter of this regulation is a series of price controls and subsidies, it can be hard to quantify how patients and providers might change their behavior.
Some providers, because of the price controls and paperwork involved with the PCIP, might opt to simply refuse to treat patients in the PCIP program. The rule acknowledges this:
While we understand that the decision to no longer treat PCIP enrollees is possible, we believe and are hopeful that most facilities and providers will accept the new payment rates established in this interim final rule given the serious health conditions many federally-administered PCIP enrollees have and the prospect that such reduced payment is temporary until 2014 when no one can generally be denied health coverage because of a pre-existing condition.
People change their behavior when their incentives change. The PCIP program gives health care providers an incentive to refuse treatment to people who desperately need it. And that unintended consequence, as opposed to paperwork, may be the true cost of today’s regulation.
Today marks the release of the twentieth anniversary edition of Ten Thousand Commandments, Wayne Crews’ annual overview of the regulatory state. Over at the Daily Caller, Wayne and I briefly summarize of few of the report’s findings. Here’s a taste:
Since the first edition of Ten Thousand Commandments was published in 1993, a touch less than 1.43 million Federal Register pages have been published. That’s an average of 71,470 pages per year. Considering that an average year has 250 workdays (the Federal Register is not published on weekends or holidays), that roughly averages out to 286 pages per day. It takes a very busy federal government to fill that many pages each and every workday.
We also ran a few numbers and found something very interesting:
A standard ream of 20-pound weight paper, standard for office use, is about two inches thick. From that, we can calculate that our 1.43 million-page stack would be 476 feet tall. It would also weigh more than seven tons. Fittingly, this regulatory tower would rival the Washington Monument’s 555 feet for supremacy of Washington’s skyline. In fact, if the tower were to keep growing at its 20-year average pace, it would surpass the Washington Monument in 2016.
When you sit down at a Mediterranean restaurant, your server will typically set down some bread on the table, then pour some olive oil into a saucer or small bowl for dipping. Many restaurants also keep small jugs of olive oil as part of their table setting for general use. It’s a delicious way to begin a meal.
New European Union regulations are set to change this centuries-long practice. Starting January 1, 2014, any olive oil served at table “must be in pre-packaged, factory bottles with a tamper-proof dispensing nozzle and labelling in line with tight EU standards.” That means no more saucers of oil for dipping, and no more refillable jugs at the table.
Most complaints about the rule have been directed at the EU’s micromanagerial tendencies, and there is certainly something to it. But there is also a public choice angle that’s worth looking at.
Many restaurants buy their olive oil from small family farms that aren’t able to comply with the new labeling and sealing standards. Restaurants buy from them because many diners prefer their olive oil to the more homogeneous product put out by larger firms. These larger firms are also precisely the people who will benefit from the new rules. A public choice theorist would point out that the big producers very likely had something to do with pushing for their passage, and their added business comes at the expense of smaller farms — and consumers’ palettes.
This kind of rent-seeking behavior is all too common. And the more regulations there are, the more rent-seeking one sees. These olive oil rules are only the latest example. Most supporters of the rule might be motivated by health and safety, but certain other supporters are more concerned with securing an artificial competitive advantage for themselves.
The The Wall Street Journal editorial board weighed in this morning on the issue of regulation, citing a few numbers from the forthcoming 20th anniversary edition of Wayne Crews’ annual Ten Thousand Commandments report. Here’s a taste:
For two decades, Wayne Crews of the Competitive Enterprise Institute has tracked the growth of new federal regulations. In his 20th anniversary edition this week, he’ll report that pages in the Code of Federal Regulations hit an all-time high of 174,545 in 2012, an increase of more than 21% during the last decade.
Relying largely on government data, Mr. Crews estimates that in 2012 the cost of federal rules exceeded $1.8 trillion, roughly equal to the GDP of Canada. These costs are embedded in nearly everything Americans buy. Mr. Crews calculates these costs at $14,768 per household, meaning that red tape is now the second largest item in the typical family budget after housing.
Read the whole thing here.
This week in the world of regulation:
- Last week, 71 new final regulations were published in the Federal Register. This is up from 64 new final rules the previous week.
- That’s the equivalent of a new regulation every two hours and 22 minutes — 24 hours a day, seven days a week.
- All in all, 1,298 final rules have been published in the Federal Register this year.
- If this keeps up, the total tally for 2013 will be 3,458 new final rules.
- Last week, 1,377 new pages were added to the 2013 Federal Register, for a total of 29,188 pages.
- At its current pace, the 2013 Federal Register will run 76,011 pages.
- Rules are called “economically significant” if they have costs of $100 million or more in a given year. For the fourth week in a row, no such rules were published last week, for a total of 12 so far in 2013.
- The total estimated compliance costs of this year’s economically significant regulations ranges from $5.58 billion to $10.19 billion.
- So far, 91 final rules that meet the broader definition of “significant” have been published in 2013.
- So far this year, 237 final rules affect small business; 21 of them are significant rules.
This new video from our friends at Cato about the growing IRS scandal is well worth five minutes of your time. Features the ACLU’s Michael MacLeod-Ball, David Keating from the Center for Competitive Politics, and Cato’s John Samples and Gene Healy (Gene’s column on the same subject is also worth reading). Click here if the video embedded below doesn’t work.
- A new technology called a “wearable robot” – basically a pair of robotic legs – enables paralyzed people to walk. As Vice President Joe Biden might say, this is a big deal. It will be ready for the market in about a year. But the real obstacle may be regulators, who have yet to approve the device.
- Street musicians in St. Louis, Missouri must audition in front of city officials before they can perform in public. (via Jacob Grier)
- In Swaziland, witches may no longer fly broomsticks more than 150 meters above the ground. The regulation is enforced by the country’s civil avaiation authority. The penalty for violators is R500,000 (South African Rands), which is equivalent to a little more than $54,000. Swaziland’s per capita GDP is $3,831. Strangely, there is no penalty for witches whose broomstick-flying adventures remain under 150 meters.
- Legislators in California and elsewhere are mulling a ban on 3-D printed guns.
- San Francisco appears poised to drop its long-running push to require radiation warning labels on cell phones. More on why cell phone radiation scares are hokum here and here.
- A 10-year old UK schoolgirl was reprimanded by police for drawing a hopscotch grid on a sidewalk. The officers claimed she was causing “criminal damage,” but let her off with a warning.
- Alabama has legalized homebrewing. It is now legal in all 50 states.
- Cato’s Ilya Shapiro with some good analysis of a bill that would rein in abuses of the Clean Water Act.
The bitter fight over Gina McCarthy, President Obama’s nominee for EPA Administrator, is headed to the Senate floor under a potential filibuster threat. Myron Ebell, Director of CEI’s Center for Energy and Environment, explains that the deeper cause of this political fight is a startling lack of transparency at the EPA that McCarthy is unlikely to fix.
The state of Indiana regulates the temperature at which convenience stores may sell beer. Specifically, they must sell it at room temperature. Cold beer is forbidden. The law, unique to Indiana, is presumably motivated by temperance concerns. People can’t buy beer on the spur of the moment and it drink it cold right away. They have to take it home and refrigerate it first. Instead of instant gratification, people have to plan ahead. This promotes more responsible drinking habits, the thinking goes.
Then again, the law exempts wine sales. Any Indianan who wants to can buy a chilled bottle of wine from the local 7-11 and drink it immediately. Instead of keeping people sober, the law amounts in practice to discrimination against beer. Wine producers might not mind that so much, but nearly everyone else does.
Even so, a push to overturn the law in the legislature failed earlier this year. That’s why three convenience store chains are suing to overturn the law. The case is currently moving through federal court. An employee of one chain told WISH, a local television station:
“Thorton’s has not built a convenience store in Indiana since 2006,” said David Bridgers of Thorton’s convenience stores, “for the sole reason of its antiquated alcohol laws.”
So not only does Indiana’s warm beer law fail to promote temperance, it is directly hampering job creation in the state.