Growls

We’ve often growled about the vast amount of red tape that entangles America’s productive class (most recently here, here, and here). In an updated “Backgrounder” on the amount of new regulation coming from the Obama Administration (No. 2482, October 26, 2010), James Gattuso, Diane Katz and Stephen Keen write:

“According to a report recently released by the Small Business Administration, total regulatory costs amount to about $1.75 trillion annually, nearly twice as much as all individual income taxes collected last year.” (emphasis added)

According to the report’s abstract:

“The burden of regulation on Americans increased at an alarming rate in fiscal year 2010. Based on data from the Government Accountability Office, an unprecedented 43 major new regulations were imposed by Washington. And based on reports from government regulators themselves, the total cost of these rules topped $26.5 billion, far more than any other year for which records are available. These costs will affect Americans in many ways, raising the price of the cars they buy and the food they eat, while destroying an untold number of jobs. With the enactment of new health care laws, financial regulations, and plans for rulemaking in other areas, the regulatory burden on Americans is set to increase even further in the coming year.”

A few of the major rulemakings identified in the appendix of the backgrounder include:

• December 1, 2009, Environmental Protection Agency, “Effluent Limitations Guidelines and Standards for the Construction and Development Point Source Category”: $810.8 million annually.
• January 8, 2010, Department of Energy, “Energy Conservation Program: Energy Conservation Standards for Certain Consumer Products (Dishwashers, Dehumidifiers, Microwave Ovens, and Electric and Gas Kitchen Ranges and Ovens) and for Certain Commercial and Industrial Equipment (Commercial Clothes Washers)”: $23.4 million annually.
• March 10, 2010, Securities and Exchange Commission, “Amendments to Regulation SHO”: $1.2 billion annually; $1.1 billion start-up.
• March 31, 2010, Department of Justice, Drug Enforcement Administration, “Electronic Prescriptions for Controlled Substances”: $1.4 billion.

Gattuso et al point out that all regulations are not unwarranted. However, they also point out that the regulatory burden, as well as the taxpayer burden, “are expected to in increase again in 2011 as agencies continue to promulgate new rules related to health care, energy, financial services, and telecommunications.

Given the exorbitant cost of the regulatory burden, the new Congress could make a serious dent in the federal deficit by taking a big bite out of the regulatory porker. The chart below, from the Heritage backgrounder, provides a brief look at the cost of major new regulations.