It’s hard enough complying with Jehovah’s Ten Commandments, let alone Uncle Sam’s multitudes of “Thou shalt” and “Thou shalt nots.”
Even so, as Clyde Wayne Crews Jr. of the Competitive Enterprise Institute points out in “Ten Thousand Commandments,” his annual study of the regulatory state, last year’s Federal Register contained 74,937 pages of proposed rules and regulations, down only slightly from the record of 75,676 pages set in 2004. That was under a Republican president and Congress that were supposedly committed to reducing the regulatory burdens imposed by Big Government.
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That same year, regulatory costs exceeded pre-tax corporate profits, confirming the widespread belief that American businesses are overregulated. Federal regulatory costs now exceed $1 trillion annually, eating up a tenth of the nation’s gross domestic product, and creating a major drag on the U.S. economy.
The CEI study notes that regulations have become a form of “off-budget taxation” that in effect forces private companies to pay for new government programs that have not withstood the rigors of the legislative process — including competition for tax dollars, public disclosure and congressional accountability. As Crews points out, the 1996 Congressional Review Act gives Congress 60 days to approve any new rule, but so far, only a 2001 Labor Department regulation on repetitive motion injuries has been rejected on Capitol Hill — out of 48,000 final rules issued by federal agencies and commissions since 1995.
Lots of headline-hunting congressmen in both major parties incessantly complain about jobs being shipped overseas, but then turn around and pass laws mandating thousands of new regulations. The result inevitably drives up the cost of keeping jobs at home, increases prices for goods and services produced here and makes it tougher for U.S. companies to compete with foreign competitors.
In a report to the Small Business Administration, analyst W. Mark Crain estimates that small businesses with fewer than 20 employees, which create the most new jobs, bear the highest regulatory burden: $7,647 per employee, compared with $5,282 for firms with 500 or more workers. Another $100 million worth of regulations in the pipeline will inevitably translate into fewer employment opportunities for American workers and higher prices for American consumers.
“Though some regulations’ benefits exceed their costs,” Crews notes, “the costs and benefits are known for relatively few regulations.” Without a credible cost/benefit analysis by somebody outside of government, nobody knows whether a proposed rule is justified or just more costly red tape created without anybody in Congress having to vote on it.
