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14 May 2019

CEI Brings Out Its 2019 edition of Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State

The Competitive Enterprise Institute has issued its 2019 Edition of Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State.  Because the government never provides the legally required accounting for the costs of regulation, CEI Vice President for Policy, the indomitable Wayne Crews, provides a conservative estimation of the costs of regulation every year.  That low-ball estimate for 2019 is $1.9 trillion.  Because the government has no desire that we know what its bewildering bureaucratic hurricane of mandates costs us, this task of making a realistic estimate of its costs is herculean.

Are you sure that a regulatory cost of $1.9 trillion can be justified by the benefits of regulation?  This is more than the entire GDP of Canada and nearly equal to the entire GDP of Brazil.  The federal government budget is $4.412 trillion.  This additional regulatory cost of $1.9 trillion makes the entire burden of the federal government at least $6.312 trillion.  Do you really think you received a reasonable value in government benefits from the $6.312 trillion?

Kent Lassman, President of CEI, in announcing the issuance of the 2019 Edition of Ten Thousand Commandments, says
.... we have recently seen some exciting progress on the regulatory front. In 1993, the Federal Register, where all new regulations are published, clocked in at 61,166 pages. Like the debt, it grew year after year, unchecked and seemingly uncontrollable. By the end of the Obama era, the year’s Federal Register took up 95,894 pages. The first year of the Trump administration, however, things changed. In 2017, the annual total was back down to 61,950 pages. In 2018, we saw only a slight increase to 63,645 pages. In other words, the annual mountain of new regulations was the smallest in a generation—and some of those pages actually contained de-regulatory actions.
While this is great progress, it is totally unreasonable to expect everyone, though mostly businessmen, to read 63,645 pages every year, to know and remember the entire sum of all prior regulations, to be aware of every court ruling on regulations of this magnitude, and to additionally know about every other memorandum issued by the regulatory agencies, of whose identities the federal government itself has no central account.  Most regulations are aimed at businessmen so this avalanche of mandates puts them at huge risk, even when one has the best of intentions with respect to the welfare of one's fellow man.  There being no cost-benefit analysis of any worth for almost any regulation, one cannot figure out how to be compliant simply by applying reason to the issue of what one can and cannot do.  Indeed, some of the best examples of completely irrational governmental requirements are to be found among our federal government's regulations.

Here are some further highlights of the report according to the CEI webpage:
  • Each U.S. household’s estimated regulatory burden is at least $14,600 annually on average. That amounts to 20 percent of the average pre-tax household budget and exceeds every item in that budget, except housing.
  • In 2018, the Trump administration issued 3,368 rules. That’s more than the 3,281 final rules in 2017, which was the lowest number of regulations coming out of federal agencies in a single year since the National Archives began publishing rule counts in 1976.
  • In 2018, Washington bureaucrats issued regulations at a rate of 11 for every one law Congress enacted. The average for this “Unconstitutionality Index” for the past decade has been 28 to one. The five agencies issuing the most rules are the Departments of Commerce, Defense, Health and Human Services, Transportation, and the Treasury.
  • President Trump should ignore his regulatory impulses on issues like antitrust, social media and technology, infrastructure, trade restrictions, telecommunications, food and drugs, subsidies, and more. Given divided government and the absence of Congressional action, the president should use executive orders to compel regulatory agencies to: put out an annual regulatory report card, implement a regulatory cost budget to keep his reform agenda on track, and address the misuse of agency guidance documents.

While writing this post, I discovered an error in the first bullet on the CEI web page which stated:
The estimated $1.9 trillion “hidden tax” of regulation is greater than the corporate and personal income taxes combined. If the cost of federal regulations were a country, it would be the 9th largest, behind India and just ahead of Canada. 
I have sent an e-mail message to Kent Lassman and Wayne Crews to alert them to this error.  I pointed out that:
It is true that $1.9 trillion is less than the GDP of India.  In order of 2019 projected GDPs, it is less than that of USA, China, Japan, Germany, India, France, United Kingdom, Italy, and Brazil and ahead of Canada.  Canada is number 10, so the burden of the $1.9 trillion of regulatory cost shoves Canada to the #11 rank as our regulatory burden takes the #10 ranking. 
So they need to change India to Brazil and #9 to #10.  I am sure they will.

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