COST OF FEDERAL REGULATION EXCEEDS $1 TRILLION

July 11, 2007

The cost of federal regulations on consumers topped $1 trillion last year, nearly 10 percent of U.S. gross domestic product (GDP), according to a new Competitive Enterprise Institute (CEI) report.

Among the findings:

  • Given that 2006 government spending reached $2.654 trillion, the hidden tax of regulation now approaches half the level of federal spending itself.
  • Regulatory costs are more than quadruple the $248 billion budget deficit.
  • The number of new regulations declined but is still well into quadruple digits; in 2006, agencies issued 3,718 final rules, a 6 percent decline from 2005.

Further:

  • New regulations by federal agencies outpace actual laws passed by Congress, indicating that considerable lawmaking power is delegated to unelected agencies. 
  • Regulatory costs exceed the estimated 2006 individual income taxes of $998 billion and dwarf corporate income taxes of $277 billion.
  • Regulatory costs exceed 2004 corporate pretax profits of $1.059 trillion.   

What is the solution for the crushing level of federal regulations on the lives and livelihoods of American workers?  CEI urges a series of reforms to make the cost of regulation more transparent and accountable to the people.  For example, Congress should commission a third-party review of the costs and benefits of regulations.  And Congress should be required to vote on agency rules before they become binding.   

Source: "Cost of Federal Regulation Exceeds $1 Trillion; Americans Burdened by Government's '10,000 Commandments,'" Competitive Enterprise Institute, July 9, 2007.

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