"If it were a country, U.S. regulation would be the world's tenth-largest economy, ranking behind Russia and ahead of India," so states a new report by the Competitive Enterprise Institute. Written by Clyde Wayne Crews Jr., the Annual Snapshot of the Federal Regulatory State as of 2015 details the federal government's choking regulations reaching to nearly $2 trillion by the end of last year.
Moreover, the "Ten Thousand Commandments" report sheds light on how the federal government uses regulation as a "hidden tax" lurking beneath Washington's very visible spending and borrowing practices, which alone inflated the national debt to $18 trillion by 2014's end. These costs are obscured from the public through the use of individual government agencies, who are then allowed to do their own cost-benefit analysis. As the report states: "Having agencies audit their own rules is like asking students to grade their own exams. Regulators are disinclined to emphasize when a rule’s benefits do not justify its costs. In fact, one could expect agencies to devise new and dubious categories of benefits to justify an agency’s rulemaking activity."
The report admits that regulatory costs aren't fully known "because, unlike taxes, they are unbudgeted and often indirect." But based on the best available data and reports from the federal government, the CEI report estimated that it cost businesses and consumers $1.88 trillion for regulatory compliance in 2014. Driving the point further, CEI showed what that number looks like divided among American citizens: "U.S. households would 'pay' $14,976 annually on average in regulatory hidden tax."
The CEI report singles out the top six offenders in the regulation game which are responsible for 48 percent of all federal rules. They are listed in order from greatest to least: the departments of the Treasury, Interior, Commerce, Transportation, Health and Human Services, and the Environmental Protection Agency.
Here are some more revealing highlights from the report:
The costs of the regulatory “hidden tax” surpass federal income tax receipts. Regulatory compliance costs exceed 2014 total individual income tax revenues of $1.386 trillion.
U.S. regulatory costs exceed each of the GDPs of Australia and Canada, the highest income nations among the countries ranked most free in the annual Index of Economic Freedom and Economic Freedom of the World reports.
Among the six all-time-high Federal Register page counts, five have occurred under President Obama.
Since the nation’s founding, more than 15,209 executive orders have been issued. President Obama issued 215 by the end of 2014.
President George W. Bush’s administration averaged 62 major rules annually during his eight years in office; Obama’s six years so far have averaged 81.
As CEI points out, lawmakers are "increasingly attracted" to regulatory spending because it largely remains out of the view of the public, unlike deficit spending: "By regulating instead of spending, government can expand almost indefinitely without explicitly taxing anybody one extra penny."
The must-read report can be found here.
