Ten Thousand Commandments 2013 - Competitive Enterprise Institute

Regulatory compliance costs exceed. 2011 estimated corporate income taxes of $237 billion and individual income taxes of $1.165 trillion. • The Weidenbaum ...
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Ten Thousand Commandments An Annual Snapshot of the Federal Regulatory State 2013 20th Anniversary Edition by Clyde Wayne Crews Jr.

Executive Summary In February 2013, the Congressional Budget Office (CBO) reported outlays for fiscal year (FY) 2012 that weighed in at $3.538 trillion and projected spending for FY 2013 at $3.553 trillion.1 President Barack Obama’s federal budget proposal for FY 2014 seeks $3.778 trillion in discretionary, entitlement, and interest spending.2 In the previous fiscal year, the president had proposed outlays of $3.803 trillion.3 For the entire Obama adminisitration, no formal budget has passed both houses of Congress and has been signed by the president. The best that might be said is that we have so far avoided entering an era of regular $4 trillion in annual spending. Trillion-dollar deficits were once unimaginable; such sums signified the level of budgets themselves, not of shortfalls. President Obama’s 2014 budget projects smaller deficits, with 2013’s claimed $901 billion to fall to $575 billion in 2018, but to rise thereafter.4 At no point is spending projected to balance in the coming decade. To be sure, many other countries’ government outlays make up a greater share of their national output, comCrews: Ten Thousand Commandments 2013

pared with 40 percent for the U.S. government.5 However, in absolute terms, the U.S. government is the largest government on the planet—whether one’s metric is revenues, expenditures, deficits, or accumulated debt. Only seven other nations top $1 trillion in annual government revenues, and none but the United States collects over $2 trillion.6

Regulation: The Hidden Tax The scope of federal government spending and deficits is sobering. Yet the government’s reach extends well beyond Washington’s taxes, deficits, and borrowing. Federal environmental, safety and health, and economic regulations cost hundreds of billions, perhaps trillions, of dollars annually over and above the official federal outlays that dominate policy debate.

The government’s reach extends well beyond Washington’s taxes, deficits, and borrowing.

Firms generally pass the costs of some taxes along to consumers.7 Likewise, some regulatory compliance costs that businesses face will find their way into the prices consumers pay and into wages earned. Precise regula1

tory costs can never be fully known because, unlike taxes, they are unbudgeted and often indirect—even unmeasurable as such.8 But scattered government and private data exist on scores of regulations and on the agencies that issue them, as well as estimates of regulatory costs and benefits. Compiling some of that information can make the regulatory state somewhat more comprehensible. That is one purpose of the annual Ten Thousand Commandments report, highlights of which follow.

For the first time in history, the estimated cost of regulation exceeds half the level of the federal budget itself.

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• This publication marks the 20th anniversary of the first edition of Ten Thousand Commandments.9 The annual outflow of over 3,500 final rules—sometimes far above that level—has meant that 81,883 rules have been issued since 1993. • The Anti-Democracy Index, the ratio of regulations issued by agencies relative to laws passed by Congress and signed by the president, stood at 29 for 2012. Specifically, 127 laws were passed in calendar year 2012, whereas 3,708 rules were issued. This disparity highlights a substantial delegation of lawmaking power to unelected agency officials. • This author’s working paper compilation “Tip of the Costberg,” largely based on federal government data, estimates regulatory costs at $1.806 trillion annually.10 • U.S. households “pay” $14,768 annually in regulatory hidden tax, “absorbing” 23 percent of the average income of $63,685, and 30 percent of the expenditure budget of $49,705. • The most recent Small Business Administration (SBA) evaluation of the overall U.S. federal regulatory enterprise esti