Federal Triangle

Governments spend money after collecting it in taxes or borrowing it in a budget process that is subject to public examination, which is purposefully obscured at times. Regulatory costs are "off-budget" and escape scrutiny; federal Legislative branch actions are interpreted by bureaucrats of the Executive branch agencies into a form that requires public adherence to regulation, but avoids specificity on who pays for these mandates. In fact, the tab for rules and regulations cost the nation $758 billion (B) in 1999 (8.2% of GDP and 44.5% of federal budget spending) and exceeds 1998 cumulative pre-tax corporate profits of $718 B. Agencies of government then spent an additional $18.8 B to administer and enforce federal mandates, increasing real costs to $777 B. Your government (the White House OMB report to Congress in January 2000) had the temerity to say that regulations cost between $174 B and $234 B and provide benefits of $264 B to $1,795 B. This was not a proper analysis, but a justification report neglecting to account for many cost elements arising from economic regulation and required paperwork. It can only come within a factor of seven in assessing benefit. Give me a break!

Total regulatory costs have increased 26% over the past decade and show greatest increase for environmental (71.4%) and paperwork (12.4%) cost categories. As America entered this year, 4,538 new rules were in the pipeline for completion in 2000, with 2,106 of them (46%) coming from five agencies (Agriculture, Commerce, Transportation, Treasury, and EPA). The 456 pending regulations from the EPA (of greatest interest to IH readers) will cover ozone and particulate ambient air quality standards, regional haze regulations, and control of emissions from non-road engines. And industry will just love this - fully 28 of the EPA pending regulations (and 137 of the total) are in the category acknowledged by OMB to cost $100 million or more annually. It is not comforting that government plans to impose 4,401 new regulations during this year, any of which could cost up to $100 million each and every year, and there is no practical or effective means for citizen oversight before such rules take force of law. The EPA has violated OMB direction and fewer than half of these economically significant or $100 million rules are accompanied by any quantitative benefit estimates.