A major obstacle often cited by those seeking to engage in business or other activities within the United States is the cost, in time and money, of complying with existing federal regulations as well as keeping track of new ones or alterations in those already existing. According to a White House analysis during FY 2016, as the Obama Administration drew to a close, executive agencies promulgated 85 major rules. But that’s only the tip of the iceberg.
According to a Forbes study by Clyde Wayne Crews Jr. , by the last workday of 2016 The printed version of the Federal Register had reached 97,110 pages, by far an all-time record. That dwarfs, Crews noted, 2015’s count of 80,260 pages, and it shattered the 2010 all-time record of 81,405 by 15,705 pages.
The Competitive Enterprise Institute reports that Federal regulation cost Americans $1.9 trillion in 2017, or nearly $15,000 per U.S. household—more than Americans spend on any category in their family budget except for housing. "While the Trump administration has made noteworthy progress toward reining in the expansion of new rules, more substantial reform will need to come from Congress in order to significantly reduce this breathtaking government burden.”
Among the key findings of the report:
- Federal regulations and intervention cost Americans $1.9 trillion in 2017.
- Federal regulation is a hidden tax that amounts to nearly $15,000 per U.S. household each year, more than Americans spend on any category in their family budget except for housing.
- In 2017, 97 laws were enacted by Congress during the calendar year, while 3,281 rules were issued by agencies. Thus, 34 rules were issued for every law enacted.
- If it were a country, U.S. federal regulation would be the world’s eighth-largest economy, ranking behind India and ahead of Italy.
- Many Americans are concerned about their annual tax burden, but total regulatory costs exceeded the $1.88 trillion the IRS collected in both individual and corporate income taxes in 2017.
- Some 67 federal departments, agencies, and commissions are currently working on 3,209 new regulations in various stages of development.
- The five most active rulemaking entities– the Departments of Commerce, Defense, Transportation, Treasury, and the Environmental Protection Agency–account for 1,359 rules, or 43 percent of all proposed regulations currently under consideration.
- The 2017 Federal Register contained 61,308 pages, the lowest count since 1993 and a 36 percent drop from Obama’s 95,894 pages in 2016, the highest level ever recorded.
A Committee for Economic Development report found that Washington’s regulatory environment “permeates our lives. [...] Regulations often are imposed on individuals and organizations with too little thought or analysis of what is gained in comparison with the losses incurred in time, money, indecision, and productivity…”
A 2017 Chamber of Commerce study found that federal regulations have a disproportionate impact on small business and free enterprise in America. According to its estimates, Washington’s red tape costs the U.S. economy up to $1.9 trillion a year in direct costs, lost productivity, and higher prices. The impact on smaller businesses, those with 50 or less employees, is far worse.
Ben Goad and Julian Hattem wrote in the Hill that “President Obama [was responsible for] a dramatic expansion of the regulatory state that will outlast his time in the White House…”
The Trump Administration has attempted to reverse the substantial growth in the federal regulatory state, issuing, within the second month of the new Administration, Executive Order 13771 which warrants that for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.
The U.S. economy has accelerated since the Obama era ended. The emphasis on decreasing regulations plays a significant role in that achievement.
Frank Vernuccio serves as editor-in-chief of the New York Analysis of Policy & Government.