Regulatory reform is at least as important as spending, taxes, and deficits, but it doesn’t get nearly as much attention. That’s why we are pleased that Sen. John Barrasso recently sent a Dear Colleague letter around the Senate explaining some of the main findings from the 2011 edition of “Ten Thousand Commandments.” A copy of the study was attached to each letter. You can read Sen. Barrasso’s letter here (PDF).
“Ten Thousand Commandments” is full of reform ideas that would lighten regulation’s heavy hand, and we are delighted that policymakers are starting to take reform ideas seriously. For those who don’t want to read the entire study, 10KC author Wayne Crews and I quickly list some reform ideas here.
Wayne Crews and I have a piece in today’s Sacramento Bee summarizing the main findings of Wayne’s “Ten Thousand Commandments” study. We also point out that regulatory costs are not limited to the $1.75 trillion it takes to comply with them:
The total cost of federal regulation is $1.75 trillion. That’s true in terms of money. But money isn’t everything. Regulation also has opportunity costs. Workers spend millions of man-hours every year filling out forms and following procedures. That time could be spent on other things instead, such as finding ways to lower costs, improve quality and increase worker productivity. When there’s too much regulation, progress and innovation slow down.
There is a second opportunity cost that is often overlooked. Companies don’t sit idly by when regulators propose new rules. They try to influence the process. Most companies, especially larger ones, often favor new regulations in their industries. They will pay lobbyists a lot of money to influence the rules in a favorable way – say, by handicapping a competitor.
The 2011 edition of Wayne Crews’ “Ten Thousand Commandments” was released today. The annual study gives a big-picture view of the regulatory state. You can read it here. Some of the main findings:
- Federal regulations cost $1.75 trillion per year. That’s equivalent to about half of federal spending. Government’s cost is actually about 50 percent bigger than most people think.
- Agencies issued 3,752 final rules in 2010. At that pace, a new rule comes into effect every two hours or so.
- Another 4,225 rules are in the pipeline right now.
- The Federal Register hit an all-time high 81,405 pages in 2010.
- Economically significant regulations are way up. These are defined as rules that have over $100 million of economic impact. There were 224 in 2010. That’s a 22 percent increase over 2009′s 184.
Wayne and other CEI scholars will have a lot more to say about regulations and how to reform them in the coming weeks; keep an ear out.
And it’s on pace to hit a near-record 80,447 pages. Over at the Daily Caller, I crunch some of the numbers and offer up some Ideas for regulatory reform, inspired by Wayne Crews’ 10,000 Commandments.
-The Federal Register’s accelerating pace is due to two things. One is implementation of the health care and financial regulation bills. The other is that, fearing a party change in Congress, lame-duck regulating may have already begun.
-Keeping Federal Register page counts in check is important. Keeping the contents of those pages in check is even more important. Comprehensive regulatory reform involves much, much more.
-Such as five-year sunsets for all new regulations unless specifically reauthorized by Congress.
-And a comprehensive look at the regulatory state in each year’s Economics Report of the President.
-And a bipartisan commission to comb through the books for harmful or obsolete regulations. They would hand their recommendations for repeal to Congress for an up-or-down vote, without amendment.
Tax Freedom Day was April 9. But when you factor in the cost of regulation (on which more here), it turns out we work nearly half the year just to pay for government. Wayne Crews and I give the details, as well as some ideas for regulatory reform, over at Fox Forum. The three we give are:
-Disclosure. Each year’s federal budget, or the annual “Economic Report of the President,” should include in-depth chapters exploring the regulatory state, along the lines of Ten Thousand Commandments. The more the public and policymakers know about regulatory costs, the more likely they are to do something about them.
-Eliminate obsolete rules. Congress should task the Office of Management and Budget with identifying rules to eliminate each year. Congress should also implement its own bipartisan packages of cuts to be voted on, up or down, without amendment. Mandatory 5-year sunsets for all new rules would also help. Congress can reauthorize useful rules, while obsolete or harmful ones would automatically expire.
-Most important of all, Congress needs to reassume its lawmaking responsibilities. It passed 125 bills last year—but federal agencies passed 3,503 final rules. This “regulation without representation” should end. There is too little accountability when it comes to regulation.
Last year Americans paid $989 billion in income taxes (Happy Tax Day!). What you probably don’t know is that federal regulations cost as much as the income tax plus another quarter-trillion — $1.24 trillion in all.
Wayne Crews catalogues the damage in the freshly-released 2010 edition of “Ten Thousand Commandments.” Well worth a read.
If you don’t have time to read the full study, Wayne and I summarize the main findings over at AOL News.
A few numbers you should be aware of: 3,503 new regulations passed last year. Hardly any were repealed. More than 95 percent of the cost is off-budget, since the private sector pays for regulatory compliance costs. That means the burden of government is about a third higher than what it spends — in all, about 30 percent of the economy goes to paying for the federal government
Over at RealClearMarkets, I explain why the answer is a resounding no:
Rep. Phil Hare argues that “reckless deregulation” is one of the causes of the current economic crisis. That isn’t actually true. This year’s edition of the Competitive Enterprise Institute’s Ten Thousand Commandments report found that 3,830 new regulations came into effect in 2008 alone.
Over 30,000 total new rules passed during the Bush years. Hardly any were repealed. Businesses currently dole out the equivalent of Canada’s entire 2006 GDP – about $1.2 trillion – just to comply with federal regulations.
Where is the deregulation?
263,989 people make their living working for federal regulatory agencies, according to research from the Mercatus Center. That’s an all-time high.
12,190 of them regulate financial markets from Washington. More are based in New York and other financial centers. None of these figures include state and local rules and regulators. Those cost extra.
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