NCPA - National Center for Policy Analysis

Federal Regulations Cost Billions

January 13, 2012

In yet another year of growing federal regulations, businesses faced enormous amounts of economic loss and wasted man-hours in compliance costs.  A recent study by the American Action Forum found that these costs are concentrated strongly in only a small number of onerous regulations, says Steve Stanek, a research fellow at the Heartland Institute.

  • According to the study, federal regulations in 2011 added more than $231 billion in regulatory costs to private businesses and state and local governments.
  • The CAFE (Corporate Average Fuel Economy) standards for light-duty vehicles had the highest single price tag with $141.4 billion in compliance costs.

Lost work hours associated with abiding by new regulations totaled an outstanding 133 million hours of paperwork.

  • Additional employee rights notifications will cost 12 million hours.
  • Medicaid eligibility changes under the Affordable Care Act will cost 11.07 million hours.
  • A new railroad conductor certification program will cost 10.99 million hours.

While these three are, according to the study, the most costly in terms of lost hours, they are only a small portion of the total regulatory burden.  However, something can be said for the progress that was made in 2011 over 2010.

  • While the Obama administration published 82,480 pages of regulations in 2010, this figure dropped to 78,464 pages in 2011.
  • Obama's Executive Order 13563, which called for an analysis of "outdated, ineffective, insufficient, or excessively burdensome" regulations, finalized $187 million in deregulatory actions in 2011.

Nevertheless, an administration that is serious about jumpstarting an economy and encouraging greater employment will do away with onerous regulations at a greater pace.

Source: Steve Stanek, "Federal Regs: 231 Billion Dollars, 133 Million Paperwork Hours," Heartland Institute, January 4, 2012. "2011: The Year in Regulation," American Action Forum, January 2, 2012.

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