NCPA - National Center for Policy Analysis

Controlling Regulatory Costs

June 6, 2000

The federal government is expected to post a budget surplus in 2000, putting an end to nearly three decades of deficit spending. If maintaining the surplus is a priority, policymakers must control regulatory costs, says Clyde Wayne Crews, Jr.

The federal government can fund its programs in three ways: taxing, borrowing money or regulating. Through regulation, the government can avoid using tax dollars to fund its programs. However, complying with excessive regulations requires spending and borrowing, and like ordinary taxes, the "hidden tax" of regulation can affect the consumer pocketbook by increasing the cost of groceries, utilities, health services and housing.

  • Approximately 20 percent ($7,410) of the average American family's after-tax budget ($41,846) is consumed by regulatory costs.
  • In 1999, regulatory costs in the US were $758 billion -- exceeding the output of Canada or Mexico.
  • The 1999 Federal Register, the daily depository of all proposed and final rules and regulations, contained 71,161 pages -- a 42.9 percent increase from 1990.

Of the 4,538 regulations at various stages of implementation in 1999, 137 are "economically significant" rules that will have at least $100 million in economic impact -- imposing projected future costs of at least $13.7 billion yearly.

Source: Clyde Wayne Crews, Jr., "Ten Thousand Commandments," April 2000, Competitive Enterprise Institute, 1001 Connecticut Avenue, N.W., Suite 1250, Washington, D.C. 20036, (202) 331-1010.


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