Actual Cost of Regulatory Compliance Reaches $1.806 Trillion
Washington, D.C., August 1, 2013 – Growing red tape from Washington is stifling U.S economic growth and innovation, and the total compliance cost has reached $1.806 trillion -- for the first time, more than half of total federal spending. So why is the U.S. Senate concocting a bizarre notion of “regulatory paralysis”-- that agencies aren't issuing rules fast enough -- in a committee hearing today? (See: Subcommittee on Oversight, Federal Rights and Agency Action, “Justice Delayed: The Human Cost of Regulatory Paralysis”)
“House leadership seems to ‘get’ that economy-crushing regulations now run amuck, but the Senate is trying to pawn off a fiction about ‘regulatory paralysis,’” said Wayne Crews, vice president for policy and director of technology studies at the Competitive Enterprise Institute and author of CEI's Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, which documents regulatory costs. “Apparently, some in Congress are offended by the Office of Management and Budget's statutory duty of reviewing major new rules and want to circumvent that process."
Citing a vague, unexplained concern over “public health and welfare,” Sens. Ben Cardin, D-Md., Sheldon Whitehouse, D-R.I., Tom Harkin, D-Iowa, Ed Markey, D-Mass., and Richard Blumenthal, D-Conn., and U.S. Rep. Henry A. Waxman, D-Calif., sent a letter in June to Sylvia Burwell, director of the Office of Management and Budget, urging her to take “prompt action” to expedite the rulemaking process and force the agency to explain why certain regulations from the Environmental Protection Agency have been delayed.
“The Obama administration is using the EPA to circumvent Congress and push massive regulations that will lead to higher energy prices and slow business growth and job creation,” said Crews.
Meanwhile, others in Congress are taking steps this week to force greater review and accountability when it comes to federal red tape.
Today, the House is expected to vote on the REINS Act, which would force Congress to vote on new federal regulations that cost more than $100 million per year (see "Congress Confronts 'Laws Gone Wild' on Forbes.com).
Also this week, Crews submitted comments to the OMB on its 2013 Draft Report to Congress on the Benefits and Costs of Federal Regulations and Agency Compliance with the Unfunded Mandates Reform Act.
“Regulations are often called a hidden tax, and their reach and cost go beyond what OMB reports,” said Crews.
What can be done? “Cost disclosure and congressional accountability are needed” to evaluate whether certain regulations do more good than harm, Crews said. “Congress must play the ultimate oversight role and address the culture of ‘regulation without representation.’”
Among the specific reform recommendations put forward by Crews:
• OMB Should Compile a Regulatory Transparency Report for Prominent Annual Publication
• OMB Should Acknowledge Indirect Costs of Regulations
• OMB Should Recommend Rules for Revision and Repeal
• Congress Should Affirm Final Agency Rules Before They Are Effective
• Congress Should Establish an Annual Regulatory Reduction Commission to Streamline Regulation
• Congress Should Sunset Rules and Implement a “One In, One Out” Procedure
> View comments by Wayne Crews on the 2013 Draft Report to Congress on the Benefits and Costs of Federal Regulations and Agency Compliance with the Unfunded Mandates Reform Act
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