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Policy Feature Issue: Regulations Burdening Families and Businesses

Policy • July 31, 2013

Federal regulations have an enormous impact on families, small businesses, and the overall economy, yet the costs they impose are difficult to comprehend.  Costly regulations touch many aspects of our lives: the price we pay for groceries, the cars we drive, and the appliances we are allowed to use in our kitchens.  As Americans continue working to recover from the economic downturn, the Federal government should support private businesses and industries in their efforts to expand and create jobs without the burden of red tape.  However, the Obama Administration has used the regulatory process as a back-door means of implementing its policy agenda.  To that end, the number of regulations that are yet to come from Obamacare, Dodd-Frank, and the President’s climate change agenda will only continue to increase costs and tie the hands of job creators, stifling economic growth.

Facts You Need to Know:

  • The major rules issued by the Obama Administration in FY2012 alone “imposed more costs on the economy than all the [major rules] issued during the entire first terms of Presidents Bush and Clinton, combined.”[1]
  • 2012 was the costliest year on record for federal regulations, with costs of up to $19.5 billion—more than double the regulatory costs of the next most expensive year.[2]
  • The number of “economically significant” rules—those imposing an annual impact on the economy of at least $100 million—issued by the Obama Administration is higher than any point in the past decade.[3]
  • By the end of 2012, the Code of Federal Regulations had grown to 174,545 pages—20% longer than it was a decade ago.[4]
  • During the first seven months of 2013, the Federal government “published $61 billion in compliance costs, and 84.9 million annual paperwork burden hours . . . .”[5]
  • The Administration’s recently-released regulatory agenda could impose regulatory costs of up to $133 billion.[6]
  • The flood of regulations is expected to continue as the Administration issues its vast regulatory scheme to implement Obamacare, the Dodd-Frank Act, and the President’s climate change agenda.
  • In 2012, for example, financial service regulators issued the largest number of major rules, as a result of the regulations required by the Dodd-Frank Act.[7]
  • Since the Dodd-Frank Act was enacted, it has imposed $15.5 billion in direct compliance costs and has produced regulations that require more than 58.5 million hours of paperwork to comply.[8]
  • The EPA issued the most costly regulations in 2012, many aimed at reducing carbon emissions.[9]
  • “[T]hrough just July 31, 2010, a full 3,833 pages of Federal regulations had already been issued under [Obamacare].”[10]

What Does this Mean for Families and Businesses?

  • Regulatory costs equal $14,678 per family—or 23.2% of a family’s average income.  In a typical family’s budget, this is second only to the amount allocated for housing.[11]
  • New fuel standards issued by the EPA and the Department of Transportation will make cars more expensive to produce, forcing drivers to pay an estimated $1,800 more per vehicle.[12]
  • The FDA has proposed that a menu labeling law created by Obamacare be unnecessarily applied to grocery stores and delivery restaurants.  This would force Americans to pay more for basic necessities by “impos[ing] a $1 billion initial cost on grocery stores” and “hundreds of millions of dollars more in recurring costs.”[13]
  • Estimates indicate that Obamacare will reduce employment by 800,000 in 2021.[14]
  • Long run projections estimate that the cost of complying with just six regulations issued by the EPA could result in the loss of as many as 9.748 million jobs.[15]
  • The cost of regulatory compliance is 36% higher for small businesses than it is for larger businesses.[16]
  • “A study sponsored by [the Small Business Administration] . . . concludes that environmental regulations act as barriers to entry for small firms.”[17]

 


[1] Susan E. Dudley, Costs of New Regulations issued in 2012 Dwarf those of Previous Years, according to OMB Report, The George Washington University Regulatory Studies Center (Apr. 22, 2013).  See also OMB 2013 Draft Report to Congress on the Benefits and Costs of Federal Regulations, Appendix tables D-1­­–D-3.

[3] Clyde Wayne Crews Jr., 2013: Ten Thousand Commandments, Competitive Enterprise Instituteat 28.

[4] Id. at 17-18.

[5] Sam Batkins, This Week in Regulation: July 22-26, American Action Forum (July 26, 2013).

[6] Sam Batkins, Highlights from the Administration’s Spring Regulatory Agenda, American Action Forum (July 8, 2013).

[7] James Gattuso and Diane Katz, Red Tape Rising: Regulation in Obama’s First Term, Heritage Foundation (May 2, 2013) at 4.  “[T]he Dodd-Frank Wall Street Reform and Consumer Protection Act imposes a host of regulatory obligations which agencies have yet to fulfill—it requires the promulgation of 398 rules, of which only 136 have yet been completed.  That leaves 262 final rules to be done, of which only 133 had even been proposed as of February 2013.”  House Committee Report 113-160 at 10.

[11] Crews, 2013: Ten Thousand Commandments at 11.

[12] James Gattuso and Diane Katz, Red Tape Rising: Regulation in Obama’s First Term, Heritage Foundation (May 2, 2013) at 4.

[14] House Budget Committee Hearing: The Congressional Budget Office’s Budget and Economic Outlook (Feb. 10, 2011) at 32.

[15] Nam D. Pham & Daniel J. Ikenson, A Critical Review of the Benefits and Costs of EPA Regulations on the U.S. Economy (Nov. 2012, ndp consulting) at 3.

[16] Small Biz Reg Watch, House Committee on Small Business.

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