The Regulatory State

May 5, 2014

It cost Americans a whopping $1.863 trillion to comply with federal regulations in 2013, more than the gross domestic product (GDP) of Canada, according to a new report from Clyde Wayne Crews, vice president for policy at the Competitive Enterprise Institute.

Federal spending and deficits dominate the debate in Washington, but the costs of federal regulations reach hundreds of billions of dollars each year. And just as corporate taxes are passed on to consumers, so are regulatory compliance costs passed on to consumers and workers in the form of higher prices and lower wages.

The Competitive Enterprise Institute's annual report on the state of federal regulations highlights the significant impact of the regulatory state on the U.S. economy:

  • The ratio of new regulations (issued by agencies) to new laws (passed by Congress) was at 51 in 2013. That is 51 new rules for every new law, equivalent to a new rule every 2.5 hours.
  • Regulatory costs equate to $14,974 per household -- 23 percent of the average household income.
  • The Federal Register last year had 79,311 pages, the fourth highest in history. The years with the highest number of pages in the Federal Register were 2010 and 2011, both under President Obama.
  • The Departments of the Treasury, Commerce, Interior, Health and Human Services, Transportation, and the Environmental Protection Agency are responsible for 49.3 percent of all federal rules.
  • Small businesses pay a disproportionate amount in regulatory costs compared to large firms. Businesses with less than 20 employees pay an average $10,585 in regulatory costs per employee, compared to $7,755 for businesses with 500 or more employees.
  • U.S. regulatory costs exceed the GDPs of both Canada and Australia.

If U.S. federal regulation were a country, it would be the 10th largest economy in the world, ranked between India and Italy.

Source: Clyde Wayne Crews, "Ten Thousand Commandments 2014," Competitive Enterprise Institute, April 29, 2014.

 

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