Cost Estimate of Government Regulations Doesn’t Measure the Real Cost

By:  Bob Adelmann
05/21/2013
       
Cost Estimate of Government Regulations Doesn’t Measure the Real Cost

The estimate that the cost of government regulations now exceed half of the annual budget for the first time fails to take into account the cost in freedoms lost in the regulatory state.

The federal government’s cost is measured not only in taxes paid by citizens, or in borrowing when tax revenues aren't sufficient, but also must be measured in terms of regulations imposed by government agencies to accomplish what Congress can’t or won’t. That’s the core of the argument presented by Clyde Wayne Crews of the Competitive Enterprise Institute (CEI) in his introduction of this year’s “Ten Thousand Commandments 2013.”

For the first time in the 20 years that the institute has been attempting to measure the cost of government agencies’ regulations, that cost now exceeds half of the annual budget, at $1.8 trillion. When added to the budget itself, which is rapidly approaching $4 trillion a year, government is absorbing more than a third of the nation’s economic output either directly or indirectly.

For instance, families "pay" nearly $15,000 a year in hidden regulatory taxes. For small businesses, regulations cost almost $11,000 per employee. And the trend is ever upward. In the past 20 years, more than 81,000 rules have been issued, more than 3,500 a year, or more than nine every day. That works out to about 30 new rules issued by agencies for every law passed by Congress. And there are another 4,000 proposed rules in the pipeline the cost of which CEI can’t yet measure.  

The tsunami of rules include regulating the importing of “unmanufactured wood products” by the Department of Agriculture, the determination of what constitutes “a single serving” by the Health and Human Services Department, “energy conservation” standards for wine chillers, battery chargers, and mobile home furnaces by the Department of Energy, and regulations concerning automobile head restraints and seat belts by the Department of Transportation.

The big Mack-daddy of all regulating agencies is the Environmental Protection Agency, whose rules, according to Crews, “are especially subject to being used to enact policies that would likely not pass muster with voters.” EPA rules in 2012 were up 44 percent over the previous year, and cost American taxpayers an estimated $353 billion every year – the most of any agency.

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