2010 Ten Thousand Commandments - An Annual Snapshot of the Federal Regulatory State
20 I 0 Edition
by Clyde Wayne Crews Jr.Executive Summary
The government's reach extends well beyond the taxes that Washington collects and the deficit spending and borrowing now surging.
A very rough extrapolation from an evaluation of the federal regulatory enterprise by economist Mark Crain estimates that annual regulatory compliance costs hit $1.187 trillion in 2009.
Given 2009's actual government spending of $3.518 trillion, the regulatory "hidden tax" stood at 34 percent of the level of federal spending itself. (Because of the recent federal spending surge, this proportion is lower than the near-40 percent level of recent years.)
The dramatic reality that regulations and deficits now each exceed $1 trillion a year is an unsettling new development for America. In 2008, regulatory costs were more than double that year's $459 billion budget deficit. Now, the 2009 deficit spending surge has catapulted the deficit well above the costs of regulation ($1.414 trillion compared to $1.187 trillion, respectively).
The game has changed, with respect to government spending versus government regulation. Although the spending and deficit levels eclipse federal regulatory costs now, unchecked government spending can translate, in later years, into greater regulation as well.
Regulatory costs are equivalent to 63 percent of all 2007 corporate pretax profits of$1.89 trillion.
Regulatory costs dwarf corporate income taxes of $147 billion.
Regulatory costs exceed estimated 2009 individual income taxes of $953 billion by 25 percent.
Regulatory costs of $1.187 trillion absorb 8.3 percent of the U.S. gross domestic product (GDP), estimated at $14.253 trillion in 2009.
Combining regulatory costs with federal FY 2009 outlays of $3.518 trillion implies that the federal government's share of the economy now reaches 33 percent.
The Weidenbaum Center at Washington University in St. Louis and the Mercatus Center at George Mason University in Arlington, Virginia, jointly estimate that agencies spent $54.3 billion ro administer and police the regulatory enterprise. Adding the $1.187 trillion in off-budget compliance costs brings the total regulatory burden to $1.24 trillion.
The 2009 Federal Register dropped significantly from its all-time high of 79,435 pages in 2008. It fell nearly 14 percent to 68,598.
Federal Register pages devoted specifically to final rules fell by 21 percent, from a record 26,320 in 2008 to 20,782 in 2009.
In 2009, agencies issued 3,503 final rules, an 8.5-percent drop from 3,830 rules in 2008.
The annual outflow of roughly 4,000 final rules has meant that nearly 60,000 rules have been issued since 1995.
Although regulatory agencies issued 3,503 final rules in 2009, Congress passed and the president signed into law a comparatively few 125 bills. Considerable lawmaking power is delegated to unelected bureaucrats at agencies.
According to the 2009 Unified Agenda, which lists federal regulatory actions at various stages of implementation, 59 federal departments, agencies, and commissions have 4,043 regulations in play at various stages of implementation.
Of the 4,043 regulations now in the pipeline, 184 are "economically significant" rules wielding at least $100 million in economic impact. Assuming those rulemakings are primarily regulatory rather than deregulatory, that number implies roughly $18 billion yearly in future off-budget regulatory effects.
"Economically significant" rules increased by 2 percent between 2008 and 2009 (following 13- and 14-percent increases in the prior two years). High federal budgetary spending now likely implies higher future regulatory costs as well.
The five most active rule-producing agencies-the departments of the Treasury, Agriculture, Commerce, and the Interior, along with the Environmental Protection Agency --- account for 1,763 rules, or 44 percent of all rules in the Unified Agenda pipeline.
Of the 4,043 regulations now in the works, 758 affect small business.