Wayne Crews

Post image for Why Is Obama’s Report to Congress on the Benefits and Costs of Federal Regulation Delayed?

In April 2013, the White House Office of Management and Budget (OMB) issued its Draft 2013 Report to Congress on the Benefits and Costs of Federal Regulations, which covered rules and regs issued in fiscal year 2012. The final 2013 edition never appeared; now, the Draft 2014 edition is due. I’m not holding my breath.

President Obama claimed again as recently as February 2013 that “this is the most transparent administration in history.”

But getting this important document, as well as the oft-delayed Unified Agenda of Federal Regulatory and Deregulatory Actions, is like pulling teeth. Part of the recent House-passed ALERRT Act addressed the Agenda’s tardiness; it’s naturally stuck in the Senate. (The Agenda is an obscure but important document wherein federal departments and agencies reveal their priorities along with disclosing recently completed rules.)

The 2013 Draft Report revealed that costs of major rules jumped under Obama; The 14 rules added during the fiscal year ended September 2012 imposed costs of from $14.8 billion to $19.5 billion (that’s in the 2001 dollars OMB uses, which look better than 2012 dollars).

The OMB breakdown incorporates only benefits and costs of a handful of major rules which the OMB or agencies have expressed in quantitative and monetary terms. It omits numerous categories and cost levels of rules altogether, and rules from independent agencies are entirely absent.

OK, that’s worrisome, but normally, final reports look fairly identical to draft reports, so the reluctance to release it is unclear. We presumably already have the “bad news.” In any event, normally by April OMB has issued the year’s Draft Report, as can be seen in the list below. There were two big exceptions: one during Obama’s first year, one during George W. Bush’s last.

April is upon us, and without the final 2013 report, it’s not looking likely that the Draft 2014 we need to see is imminent. Regarding final reports, they always appeared by year-end up through 2005. Since then, apart from 2010 and 2011, a given year’s report hasn’t appeared until the following year. But they have only been this late twice (in 2012 under Obama, and in 2007 under Bush). Even when final reports were delayed into the subsequent year, we usually had them by January.

It should be adequate that regulation is allowed to grow without much restraint; the lack of timely disclosure of the relative handful of rules that get scrutiny in the only formal report on regulatory costs is too much.

Here is a list of Draft and Final reports’ dates of appearance since 2002.

Date Draft Final
2014 Due Now n/a
2013 April Overdue
2012 March April 2013
2011 March June
2010 April July
2009 September January 2010
2008 September January 2009
2007 March June 2008
2006 April January 2007
2005 March December
2004 February December
2003 February September
2002 March December

A mixed economy like ours does not remain static.

Economic activity increasingly shifts toward government outright (health care, retirement, education) or exists under “Mother-May-I” constraints like energy production does.

The greatest threat to job creation, wealth and prosperity is that we extend these anti-freedom regulatory policies into tomorrow’s innovations in communications, robotics/automation, manufacturing, and sciences and technology.

When more and more activity falls within the ambit of government rather than that of private competitive enterprise, rules and regulations, executive orders and “notices” take on ominous new significance. This is worsened by policymakers continually dodging the constitutional imperative that an elected body (Congress) create legislation.

Newly significant too are President Barack Obama’s “pens,” “phones” and “years of action” self-consciously operating outside the normal legislative process and even normal Administrative Procedure Act public-input thresholds.

The president just extended the deadline on signing up for Obamacare marketplaces, for example. Exemptions multiply, no matter what the statute says. Meanwhile, what could have been a healthy integrative private health provision and insurance market crumbles.

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Post image for New Data: Code of Federal Regulations Expanding, Faster Pace under Obama

The annual Code of Federal Regulations (CFR) is the “codification of the general and permanent rules published in the Federal Register by the departments and agencies of the Federal Government.”

The page count for final general and permanent rules in the 50-title CFR seems less dramatic than that of the oft-cited Federal Register, which now tops 70,000 pages each year (it stood at 79,311 pages at year-end 2013, the fourth-highest level ever). The Federal Register contains lots of material besides final rules.

Still, the CFR “Archive-Of-All” is big. Very big. Back in 1960, the CFR contained 22,877 pages in 68 volumes.

The pace picked up. The CFR stood at 71,224 pages by year-end 1975, in 133 volumes.

Now, new data from the National Archives shows that the CFR stands at 175,496 at year-end 2013, including the 1,170-page index. (See the breakout below.)

That’s a 146 percent increase since 1975. The number of CFR volumes stands at 235 (as of 2012; the 2013 count remains unavailable for the time being), compared with 133 in 1975.

More recently, at the end of President George W. Bush’s second term (2008), there were 157,974 pages in the CFR.

That means President Obama has added 17,522 pages of regulations in his five years in office; one president growing the regulatory state 11 percent increase in five years.

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Post image for Reining in the Executive Branch Bureaucracy, Part 11: Sunset Regulations and Implement a “One In, One Out” Procedure

Since the Federalist Papers, America has debated “Energy in the Executive.” But President Obama’s 2014 agenda framed by his State of the Union address heralds a class warfare agenda, one fusing an “income inequality” theme with federal industrial policy and other activism.

When I can act on my own without Congress, I’m going to do so,” Obama promises. This spend-and-transfer fixation makes Americans poorer and dependent except for the lucky few running things.

Others have argued for federal budget rationality as essential to any anti-poverty agenda. This series proposes a greater prosperity enhancing opportunity, streamlining the nearly $2 trillion regulatory state and ending the uncertainty, wealth destruction and job loss it creates.

What if regulations went away occasionally?

Review and sunsetting requirements built into laws and regulations might be used to incentivize agencies to repeal outdated rules.

Sunsetting clauses essentially put an expiration date on new regulations such that they phase out unless their extension is justified through a review process (yes, most will call for continuation, which is a massive problem with the idea). Such procedures could encourage efficiency, boost accountability and foster more productive versions of reports like the Office of Management and Budget’s Reports to Congress on Regulatory Benefits and Costs.

The United Kingdom, which, among other nations, is experimenting with bulk regulatory reduction commission mechanisms and other “Better Regulation” programs, has created sunsetting and review options to apply to new regulations.

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Post image for Reining in the Executive Branch Bureaucracy, Part 10: Congress Should Create an Annual Regulatory Reduction Commission

Since the Federalist Papers, America has debated “Energy in the Executive.” But President Obama’s 2014 agenda framed by his State of the Union address heralds a class warfare agenda, one fusing an “income inequality” theme with federal industrial policy and other activism.

When I can act on my own without Congress, I’m going to do so,” Obama promises. This spend-and-transfer fixation makes Americans poorer and dependent except for the lucky few running things.

Others have argued for federal budget rationality as essential to any anti-poverty agenda. This series proposes a greater prosperity enhancing opportunity, streamlining the nearly $2 trillion regulatory state and ending the uncertainty, wealth destruction and job loss it creates.

Congressional accountability and even something as dramatic as passage of the REINS Act (to require Congress to affirm major agency rules) would target future mandates rather than the existing regulatory state.

The Office of Management and Budget (OMB) pegs costs at up to $84 billion as of 2013 (Draft Report on Benefits and Costs of Federal Regulation, p. 3), a far from inclusive underestimate.

To deal with the existing enterprise of hundreds of billions of dollars annually, Congress should implement an ongoing Regulatory Reduction Commission to streamline aggregate regulation. Former Senator Phil Gramm (R-Texas) first proposed such an idea, modeled on the military Base Closure and Realignment Commission (BRAC).

The Progressive Policy Institute has embraced a similar idea, calling it a Regulatory Improvement Commission, perhaps making this now bipartisan idea capable of the most traction in a regulatory reform campaign.

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Post image for Reining in the Executive Branch Bureaucracy, Part 9: Congress Must Affirm Final Agency Rules before They Are Law

Since the Federalist Papers, America has debated “Energy in the Executive.” But President Obama’s 2014 agenda framed by his State of the Union address heralds a class warfare agenda, one fusing an “income inequality” theme with federal industrial policy and other activism.

When I can act on my own without Congress, I’m going to do so,” Obama promises. This spend-and-transfer fixation makes Americans poorer and dependent except for the lucky few running things.

Others have argued for federal budget rationality as essential to any anti-poverty agenda. This series proposes a greater prosperity enhancing opportunity, streamlining the nearly $2 trillion regulatory state and ending the uncertainty, wealth destruction and job loss it creates.

To improve regulatory cost accountability, the 104th Congress passed the Congressional Review Act (CRA). That law sets up a 60-day period following agency publication of a regulation during which the rule will not take effect. That 60-day pause affords Congress an opportunity, should it desire, to pass a resolution of disapproval to halt the regulation.

It rarely has that desire. The CRA was a symbolic nod toward congressional accountability for regulations. But it amounts to a 2/3 supermajority requirement to strike a law that Congress never made in the first place when the president vetoes a disapproval resolution. And since Congress benefits from delegation and no rollback reaches the president’s desk anyway, the law doesn’t work. (Well, OK, the CRA did halt an “ergonomics” rule, on repetitive motion injuries.)

The superior approach to ensuring congressional accountability is to require that no major or economically significant agency rule (or controversial rule) becomes law until it receives an affirmative vote by Congress. An expedited approval process along with en bloc voting on regulations could suffice.

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Post image for Reining in the Executive Branch Bureaucracy, Part 8: Create a Culture of Repealing Regulations

Since the Federalist Papers, America has debated “Energy in the Executive.” But President Obama’s 2014 agenda framed by his State of the Union address heralds a class warfare agenda, one fusing an “income inequality” theme with federal industrial policy and other activism.

When I can act on my own without Congress, I’m going to do so,” Obama promises. This spend-and-transfer fixation makes Americans poorer and dependent except for the lucky few running things.

Others have argued for federal budget rationality as essential to any anti-poverty agenda. This series proposes a greater prosperity enhancing opportunity, streamlining the nearly $2 trillion regulatory state and ending the uncertainty, wealth destruction and job loss it creates.

Agencies and the OMB review process should face a higher burden of proof regarding rules’ value.

What bureaucracies do has become untethered from economic efficiency and public safety. Their “regulation” does not necessarily make people safer, environments cleaner, or markets efficient.

One mild attempt at dealing with Rules Gone Wild was the January 2011 Executive Order 13563 on “Improving Regulation and Regulatory Review. It called for agencies to develop and execute plans to:

[P]periodically review its existing significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective or less burdensome.

Mild doesn’t work anymore, and modification and streamlining doesn’t happen. When agency analyses appear not to justify a rule or simply don’t exist, which is the normal case, reviewers at OMB should be more forthright about say so, and make doubts plain. Yet even as over 3,500 rules and regulations accumulate annually, Congress, agencies, the president and the Office of Management and Budget stand by idly, reluctant to recommend legacy regulations to eliminate.

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Post image for Here Are the Obama Administration’s 191 Big-Dollar “Economically Significant” Rules and Regulations

If you pay any attention to the debate over federal regulation (there are at least three or four of you), you inevitably hear about “economically significant” rules, and are then told that they have economic impacts (usually costs rather than liberalizations) of at least $100 million annually.

The technical definition is actually different, but such rules are also often referred to as “major” rules. In any event, while the total number of rules and regulations each year tops 3,500, the number of them in the economically significant category over the past decade has ranged from as low as 127 to as high as 224 in the Unified Agenda of Federal Regulatory and Deregulatory Actions each Fall.

The Agenda is like looking at a year-end pipeline, a flow of rules at the “Active” (pre-rule, proposed and final rule states), “Completed” and “Long-term” stages. Often rules are repeats from the year or years before. The Fall edition also includes a so-called “Regulatory Plan” for some agencies that singles out some rules for attention.

Items that get featured or prioritized in the Agenda vary over the years. For example, the Obama administration recently told agencies not to talk so much anymore about their languishing “Long-term” rules, which can be good or bad. It is also the case that Agencies are not legally bound to limit themselves only to what they present in their annual Agendas.

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bush-obamaThe 1996 Congressional Review Act (CRA) requires agencies to submit reports to Congress on their major rules — frequently defined as those costing $100 million or more. Owing to such reports, which are maintained in a database at the Government Accountability Office, one can more readily observe which of the thousands of final rules agencies issue each year are major and which agencies are producing the rules.

The CRA gives Congress a window of 60 legislative days in which to review a major rule and, if desired, pass a resolution of disapproval rejecting the rule. Despite the issuance of thousands of rules since the act’s passage, including many dozens of major ones, only one has been rejected: the Labor Department’s rule on workplace repetitive-motion injuries in early 2001.

There were 77 major rules in 2013 (the list may be seen here), 67 in 2012 and 80 in 2011. The 99 rules in 2010 had been the highest number since this tabulation began following passage of the CRA. The following, derived from the GAO database of major rules, depicts the number of final major rule reports issued by the GAO on agency rules through 2013:

BUSH (Avg: 63)
2001, 70
2002, 51
2003, 51
2004, 66
2005, 56
2006, 56
2007, 60
2008, 95

OBAMA (Avg: 81)
2009, 84
2010, 99
2011, 80
2012, 67
2013, 77

President George W. Bush averaged 63 major rules per year during his eight years in office; Obama’s five years so far have averaged 81. President Obama has talked about regulatory lookbacks and reducing regulation in his executive orders on the topic, but his major rulemakings average 29 percent higher than Bush.

The rise isn’t much of a surprise in the wake of the Affordable Care Act and the Dodd-Frank financial regulation law. The Department of Health and Human Services, the Securities and Exchange Commission and the Commodity Futures Trading Commission are becoming increasingly active in terms of major rules.

The federal departments and agencies responsible for the major rule load mirror the most active executive and independent agency rulemakers in general (see Ten Thousand Commandments).

There were 3,659 rules and regulations last year once we look beyond the few dozen majors. This is far from a record level, but what is interesting is the trend in the more costly rules. And, no one really accounts for the costs of the non-major ones.

Post image for Reining in the Executive Branch Bureaucracy, Part 7: Recognize and Reduce Indirect Costs of Regulation

Since the Federalist Papers, America has debated “Energy in the Executive.” But President Obama’s 2014 agenda framed by his State of the Union address heralds a class warfare agenda, one fusing an “income inequality” theme with federal industrial policy and other activism.

When I can act on my own without Congress, I’m going to do so,” Obama promises. This spend-and-transfer fixation makes Americans poorer and dependent except for the lucky few running things.

Others have argued for federal budget rationality as essential to any anti-poverty agenda. This series proposes a greater prosperity enhancing opportunity, streamlining the nearly $2 trillion regulatory state and ending the uncertainty, wealth destruction and job loss it creates.

Accountability in government and basic fairness require acknowledging indirect effects of regulation and minimizing negative impacts.

In the series “Cataloging Washington’s Hidden Costs, it was noted that indirect costs may often be omitted from compliance-focused regulatory direct cost estimates, such as the engineering costs of controlling an emission.

But if indirect costs are regarded as too difficult to compute, then government cannot credibly argue that compliance is somehow not overly burdensome.

If Congress continues to allow regulators to overlook entire categories of indirect costs (such as product bans, disapprovals of pipelines, employment impacts or antitrust regulation’s re-orienting of entire industries), then regulations can tend toward such hard-to-quantify types, imposing grave burdens and dampening productivity. Under such scenarios, many regulations could be expected to feature bans or disapprovals so that regulators would avoid appearing to impose high direct regulatory costs despite hardship inflicted.

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