Ten ThousandCommandments
2012
An Annual Snapshot of the Federal Regulatory State An Annual Snapshot of the Federal Regulatory State
By Clyde Wayne Crews Jr.By Clyde Wayne Crews Jr.
Competitive Enterprise InstituteCompetitive Enterprise Institute
Crews:
Ten Thousand Commandments 2012
1
President Barack Obama’s ederal budgetproposal or iscal year (FY) 2013 sought arecord $3.803 trillion in discretionary, en-titlement, and interest spending.
1
In the pre-vious iscal year, the president had proposedoutlays o $3.78 trillion.
As o January 2012,the Congressional Budget Oice (CBO)projects FY 2012 spending will end up at$3.601 trillion.
2
For reerence, President George W. Bushproposed not only the irst-ever $3 trillionU.S. budget, but also the irst $2 trillion ed-eral budget—in 2002, just 10 years ago.
3
Weare now approaching the era o the $4 tril-lion budget.The result: With spending escalation comesdeicit escalation. FY 2011 concluded with a$1.296 trillion deicit, matching FY 2010’s$1.294 trillion.
4
CBO’s deicit projection orFY 2012 (which will conclude September 30)stands at $1.079 trillion as o January 2012.
5
Trillion-dollar deicits were once unimagi-nable; such sums once signiied only the levelo budgets themselves, not o shortalls. Atleast with the unveiling o the 2013 budget,President Obama projected smaller deicits, with 2013’s claimed $901 billion to all to$575 billion in 2018, but rising thereater.
6
At no point is spending projected to balancein the coming decade.To be sure, many other countries’ govern-ments consume a greater share o their na-tional output than the U.S. governmentdoes.
7
However, in absolute terms, the U.S.government is the largest government on theplanet—whether one’s metric is revenues,expenditures, deicits, or accumulated debt.Only seven other nations top $1 trillion inannual government revenues, and none butthe United States collects over $2 trillion.
8
Regulation: A Hidden Tax
The scope o ederal government spendingand deicits is sobering. Yet the government’sreach extends well beyond the taxes Wash-ington collects and its deicit spending andborrowing. Federal environmental, saety
Ten Thousand Commandments
An Annual Snapshotof the Federal Regulatory State
2012 Editionby Clyde Wayne Crews Jr.
Executive Summary
Precise regulatory costs can never be fully knownbecause, unliketaxes, they areunbudgeted and oftenindirect—evenunmeasurable assuch.
2Crews:
Ten Thousand Commandments 2012
and health, and economic regulations costhundreds o billions—perhaps trillions—o dollars every year over and above the costs o the oicial ederal outlays that dominate thepolicy debate.Economics 101 on tax incidence explainshow and why irms generally pass along toconsumers the costs o some taxes.
9
Like- wise, some regulatory compliance costs thatbusinesses ace will ind their way into theprices consumers pay and into wages earned.Precise regulatory costs can never be ully known because, unlike taxes, they are un-budgeted and oten indirect—even unmea-surable as such.
10
But scattered governmentand private data exist on scores o regulationsand on the agencies that issue them, as wellas estimates o regulatory costs and beneits.Compiling some o that inormation canmake the regulatory state somewhat morecomprehensible. That is one purpose o theannual
Ten Thousand Commandments
report,highlights o which appear next.
•
The most recent Small Business Ad-ministration (SBA) evaluation o theoverall U.S. ederal regulatory enterprise,prepared by economists Nicole V. Crainand W. Mark Crain, estimated annualregulatory compliance costs o $1.752trillion in 2008.
•
Earlier SBA reports pegged costs at $1.1trillion in 2005 and at $843 billion in2001. Meanwhile, a subset o 105 rulesreviewed during 2000-2012 by the O-ice o Management and Budget (OMB)notes annual costs o between $44 bil-lion and $62 billion.
•
Given 2011’s actual government spend-ing or outlays o $3.598 trillion, SBA’sestimated regulatory “hidden tax” standsat 48.7 percent o the level o ederalspending itsel.
•
The dramatic reality that regulations andrecent deicits now each exceed $1 tril-lion a year is an unsettling developmentor the United States.
Back in 2008,estimated regulatory costs were morethan double that year’s $459 billionbudget deicit. But the deicit spendingsurge to more than $1 trillion annually since 2009 has institutionalized a deicitnearly equivalent to estimated annualregulatory compliance costs.
•
Government spending’s relationship togovernment regulation bears scrutiny by policy makers. Unchecked outlays anddeicit spending that enlarge the scope o government can translate, in later years,into greater regulatory compliance costsas well.
•
SBA-estimated regulatory costs exceedall 2009 corporate pretax proits o $1.317 trillion.
•
Regulatory compliance costs dwar cor-porate income taxes o $198 billion.
•
Regulatory costs tower over the esti-mated 2011 individual income taxes o $956 billion by 83 percent.
•
Regulatory costs o $1.752 trillionamount to 11.7 percent o the U.S. grossdomestic product (GDP), estimated at$14.954 trillion in 2011.
•
Combining regulatory costs with ederalFY 2011 outlays o $3.598 trillion revealsa ederal government whose share o theentire economy now reaches 36 percent.
•
The Weidenbaum Center at WashingtonUniversity in St. Louis and the MercatusCenter at George Mason University in Arlington, Virginia, jointly estimate thatagencies spent $55 billion (on budget)to administer and police the regulatory enterprise. Adding the $1.752 trillionin o-budget compliance costs bringsthe total regulatory enterprise to around$1.8 trillion.
•
The 2011
Federal Register
stands at81,247 pages. That number is just shy o 2010’s all-time record-high 81,405pages. These years are the only two in which the number o
Federal Register
pages topped 81,000.
•
Federal Register
pages devoted speciically to inal rules rose by 5.4 percent—rom24,914 to a near-record-high 26,274 in2011.
•
In 2011, agencies issued 3,807 inalrules, compared with 3,573 in 2010, a6.5-percent increase.
•
Proposed rules appearing in the
Federal Register
increased even more than thenumber o inal rules, rom 2,439 to
Unchecked
outlays and decit
spending thatenlarge the scopeof governmentcan translate, inlater years, into greater regulatory compliance costsas well.
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Wayne Crews - 10,000 Commandments 2012
Ten Thousand Commandments is "an annual snapshot of the federal regulatory state." Every year, Wayne Crews researches and writes Ten Thousand Commandments to hold government officals accountable for the costs they pass on to the American taxpayers. Read more about the report---and browse the archives---at http://cei.org/10kc
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