Flying Blind In A Red-Tape Blizzard

How George Bush became the regulator-in-chief

Jonathan Rauch | July 18, 2007

Attention, small-government conservatives: Ever helpful, this column has found yet another reason to be unhappy with President Bush. He appears to be the biggest regulator since the Nixon-Ford years.

Last month, George Mason University's Mercatus Center and the Weidenbaum Center on the Economy, Government, and Public Policy at Washington University in St. Louis released the latest of their annual reports on regulation in Washington. (The report, by Jerry Brito and Melinda Warren, is available at Mercatus.org.) Now, these numbers need to be handled with caution. They measure how much money the government's departments and agencies are spending to regulate, and how many people they are employing to do it. They give, at best, a rough indication of how quickly the regulatory wheels are turning.

The left panel of this chart tells the story. (The percentage calculations are mine, based on data supplied by the Weidenbaum Center.) From 2001 through 2006, Bush has increased inflation-adjusted regulatory spending by 6.5 percent a year, and increased regulatory staffing by 6.3 percent. You have to go back before President Carter (a deregulator) to find a president who has done as much regulatory spending and hiring as Bush. (Adding the projected figures for 2007 does not substantially change the picture.)

A cruder, but still suggestive, measure of regulatory activity is the annual page count in the Federal Register, where the government publishes proposed and final regulations. Burdensome regulations may be concise, of course, and deregulation can run to hundreds of pages. Still, if the page count moves in the same direction as regulatory spending and staffing, that deepens suspicion that something is really happening. Sure enough, as the right panel of the chart shows, Bush outstrips Carter, the previous record-holder for average annual Register pages.

A new report by Wayne Crews of the Competitive Enterprise Institute, a free-market think tank, estimates that federal regulation now costs the economy more than $1.1 trillion a year. Crews also takes note of one data series that points in a contrary direction: The raw number of final rules published in the Federal Register is down since the 1990s; indeed, it has been declining since the 1970s. "But that doesn't tell you about the costs of those rules," he cautions.

Nor does it tell you about the benefits. Asked about the rising indicators of red tape, the Office of Management and Budget points to its recent draft report [PDF] to Congress on the costs and benefits of federal regulation. The OMB report finds that the average annual cost of major regulations issued during the Bush years was almost 50 percent lower than in the 1980s and 1990s, and that the average benefits were more than twice as large as in the Clinton years.

Note the word "major": To earn that sobriquet, a regulation must cause an estimated economic impact of $100 million or more. Fewer than 1 percent of regulations qualify, so OMB's figures give an incomplete picture. Moreover, some regulatory economists take the administration's cost-benefit analyses with a grain of salt. "Over the years, I have found that many analyses done by government regulatory agencies have major flaws," says Robert Hahn, the executive director of the AEI-Brookings Joint Center for Regulatory Studies. Agencies, after all, are inclined to produce cost-benefit analyses that justify what they do.

That said, OMB may have a point. If liberal public-interest groups' portrayals of Bush as the anti-regulatory Antichrist are any indication, the administration may be acting as a stricter gatekeeper than its predecessors did. Even so, the Bush administration may be regulating both more efficiently and more extensively. It may be raising the cost-benefit bar for major rules in such traditional domains as the environment, while also extending regulation's reach.

The only way to be sure would be to analyze the thousands of regulations promulgated in recent years and score them on efficiency and scope. Through a glass darkly, however, it is possible to make out the fuzzy outlines of a familiar Bush pattern.

According to the Mercatus-Weidenbaum report, the bulk of the increase in regulatory spending and staffing is for homeland security: such functions as airport screening (the creation of the Transportation Security Administration alone accounts for 80 percent of the staffing increase under Bush, though only 29 percent of the spending increase), maritime and border enforcement, new air-cargo rules, and so on. Subtract homeland security, and Bush turns out to be as tight a regulator as Reagan was, with annual growth of regulatory spending and staffing at rates of 2.6 percent and 0.1 percent, respectively, through 2006.

Prepare, then, for a shock of recognition: On regulation, as on everything else, the Bush administration's war on terrorism is driving an expansion of government.

Are we getting our money's worth from Bush's security-driven burst of regulation? The answer, unfortunately, is that no one knows. The science of cost-benefit analysis, which took decades to get a handle on economic and social regulation, has yet to find any purchase at all on security regulation. Figuring out whether a 20 percent reduction in particulate emissions makes economic sense is difficult (it depends on many intangibles, such as how much human health is worth), but it is at least roughly do-able, and the government often tries to do it.

Security costs and benefits, by contrast, are notoriously conjectural. We can estimate the cost of an attack on the Brooklyn Bridge, but not the attack's likelihood. Estimating the benefits of security is even more difficult, because averted attacks are generally invisible and because hardening one target may merely displace terrorist activities to others, increasing risk elsewhere.

Those analytical problems are compounded by a strategic one: The greater a potential vulnerability, the less willing security officials are to help economists quantify it. Douglas Holtz-Eakin, who was the Council of Economic Advisers' chief economist in the first two years of the Bush administration before becoming director of the Congressional Budget Office, recalls asking agencies to justify proposed security regulations by providing specifics about threats. "They said, 'There's no way we can disclose that,'" he says. In the government, he adds, "I don't know of any serious thinking about the benefits and costs" of homeland-security regulation.

Comments

|7.18.07 @ 3:44PM|#

Does it even matter anymore? We all knew he increased spending more than anyone since LBJ. That money had to be going somewhere.

|7.18.07 @ 3:50PM|#

Since this came up, I have a challenge to the Reason staff, to maybe take up as Dubya becomes an actual lame duck: I'd like you to report on ten GOOD things (from a libertarian standpoint) that have happened on his watch. Will ten be way too many to ask? Perhaps, but I have a few to start:

-Letting the assault weapons ban expire
-Tax cuts
-The "do not call" list

If you guys can come up with seven more you deserve a Pulitzer.

|7.18.07 @ 3:56PM|#

The stem cell vetoes have to count, insomuch as they block federal spending on something not illegal for private companies to pursue

Wrongheaded, but its something

ed|7.18.07 @ 3:56PM|#

Nothing "good" ever happens.
It's been all downhill since the first George W.

|7.18.07 @ 4:08PM|#

He vetoed that massive pork spending bill, but I think that should only count as a 1/2 thing he did well.

|7.18.07 @ 4:10PM|#

Taktix,

He only did that because there was a superficial timetable for withdrawl from Iraq. If there wasn't, it'd be law now. Is that what you meant by "1/2?"

|7.18.07 @ 4:12PM|#

The do not call list is not a good thing from a libertarian standpoint.

I mean, come on, the government maintaining a database of phone numbers not eligible for commercial calls?

If a phone company wants to maintain one, great. I'd even sign on to it. But the DNC list is about as much the government's business as how much nudity I watch on TV.

|7.18.07 @ 4:14PM|#

OK tarran, I guess I could concede that one. We always have the option of using caller ID or hanging up once we know who interrupted our dinner. Still, I'm not complaining that I don't get many sales calls anymore.

goober|7.18.07 @ 4:20PM|#

Taktix, he also signed massive pork spending bill a couple of years prior to vetoing the one this year.

|7.18.07 @ 4:26PM|#

sage,
Reason on no-call hier

|7.18.07 @ 4:37PM|#

Assault weapons ban: I don't care for guns myself. I think both side of the gun rights debate grossly over blow the issue. As a libertarian, I opposed the ban. We are better off without it. I personally couldn't care less.

Tax cuts: Tax cuts without the corresponding spending cuts is irresponsible. Cutting taxes in conjunction with passing out federal credit cards to every sailor walking off the ship, Worst Presidency Ever.

|7.18.07 @ 4:39PM|#

Sage,

Yes that is what I meant.

All,

Here's one: He set the precedent that no President will ever land on an aircraft carrier and declare victory in a war.

Senior adviser in 2020: "Mr. President, we've beaten China and secured peace. You should go announce it to the MexAmeriCanadan people."

President in 2020: "No way. It's not stable enough yet, and I don't want to pull a 'Bush.'"

brian|7.18.07 @ 4:52PM|#

Warren
Tax cuts: Tax cuts without the corresponding spending cuts is irresponsible. Cutting taxes in conjunction with passing out federal credit cards to every sailor walking off the ship, Worst Presidency Ever.

Exactly. As Milton Friedman said, "to spend is to tax" since all government spending has to be paid by taxpayers eventually. He simply shifted the tax burden from us to our kids (well, I'm young, so he shifted it to me). Bush increased spending, therefore he increased future taxes. The worst part is that he doesn't get the rap for that future tax-hike, even though it really is his fault.

Note: of course, the other possibility is that future Congresses will cut spending to offset the 2001/2003 tax cu....hahahaha I almost said that with a straight face!!

shecky|7.18.07 @ 5:34PM|#

Cutting taxes was a start. Cutting spending would be considered following through. From a neocon perspective, it was an accomplishment. From a libertarian perspective, I'd say close, but no cigar.

|7.18.07 @ 5:37PM|#

sage,

How are you giving credit to Bush for "letting the assault weapons ban expire"? He said he'd sign a renewal of the ban if Congress passed it. It was the Republicans in Congress who deserve the credit for keeping it from getting renewed.

|7.18.07 @ 5:47PM|#

Crimethink is indeed correct, though I imagine that Bush's claim that he would renew the ban was delivered with a wink and a nudge.

Regardless, the country is now better off without tens of thousands of people being considered felons because of the date of manufacture on a stamped sheet metal box was after some arbitrary deadline.

Tom|7.18.07 @ 6:38PM|#

The stem cell vetoes have to count, insomuch as they block federal spending on something not illegal for private companies to pursue

Except the stem cell bills didn't provide for a cent in funding. The NIH is still spending the same amount, just (theoretically) less effectively.

|7.18.07 @ 8:07PM|#

Since this came up, I have a challenge to the Reason staff, to maybe take up as Dubya becomes an actual lame duck: I'd like you to report on ten GOOD things (from a libertarian standpoint) that have happened on his watch. Will ten be way too many to ask? Perhaps, but I have a few to start:

-Letting the assault weapons ban expire
-Tax cuts
-The "do not call" list


can i just write tax cuts 10 times?

|7.18.07 @ 8:12PM|#

Tax cuts: Tax cuts without the corresponding spending cuts is irresponsible. Cutting taxes in conjunction with passing out federal credit cards to every sailor walking off the ship, Worst Presidency Ever.

Only problem with that is despite not cutting spending we are now headed into zero deficit spending territory.

The little secret that is not being reported is that the tax cuts payed for them selves...Laffer was right and the last 6 years of Bush proved it.

Go ahead look up how big the deficit is now warren...its a nice kick in the pants

|7.18.07 @ 8:27PM|#

How are you giving credit to Bush for "letting the assault weapons ban expire"?

Whoa! Let's all try to remain calm here. I never gave any credit to him for that. I simply said it was something good that happened during his watch.

Look, I was simply posing a challenge to the Reason folks. But not for a list of good things he's actually done. You could count that on half a finger.

IRT the tax cuts, yeah the spending cuts would be nice too, so that one could go with a big asterisk. Still, it's nice to take home a little more of my own money.

|7.18.07 @ 8:34PM|#

Cutting taxes without cutting spending simply shifts the bill somewhere else, but it does artificially put pressure on Congress to slow down the increase in the rate of spending. If the tax cuts hadn't happened, those politicians would have ramped up spending, because there is no such thing as a permanent budget surplus -- an ironclad law of any legislature is that spending rises to match revenue tout suite.

The Supreme Court picks didn't suck as badly as I thought they might, at least on the economic front.

Can't think of anything else praiseworthy about Bush II's admin.

How's that for damning with faint praise?

|7.18.07 @ 8:44PM|#

"He set the precedent that no President will ever land on an aircraft carrier and declare victory in a war."

I don't know about that. The GOP is so perverse about things they'll probably start holding their political conventions on aircraft carriers in commemoration of that great victory.

|7.18.07 @ 8:45PM|#

Cutting taxes without cutting spending simply shifts the bill somewhere else

WRONG! The tax cuts payed for themselves...look at the deficit numbers.

Hey don't you think it might be a good idea to stop copying Dem talking points on issues....The Iraq war caught Reason with its pants down...we should take that as a learning lesson not as justification for doing the same stupid fucking thing with tax and spending.

|7.18.07 @ 8:46PM|#

"but it does artificially put pressure on Congress to slow down the increase in the rate of spending."

Since when? With Cheney saying "deficits don't matter", and Bush signing every spending bill, where is the pressure supposed to come from?

|7.18.07 @ 8:47PM|#

" The tax cuts payed for themselves"

Even the Bush administration's own economists don't make that claim.

|7.18.07 @ 9:09PM|#

Since when? With Cheney saying "deficits don't matter", and Bush signing every spending bill, where is the pressure supposed to come from?

here:

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-07-11T030234Z_01_N10256306_RTRIDST_0_BUSH-BUDGET.XML&pageNumber=1&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage1

Democrats have sketched out a spending plan for fiscal year 2008 that exceeds by around $22 billion the $933 billion Bush has requested. The president has said he will use his veto to enforce that limit.

Robert|7.18.07 @ 9:17PM|#

CAFTA
Saddam Hussein is dead.
No Democrat appointed any federal judges.
some new drug marketing approvals
war without institution of a draft
Justice Dept. pro guns as individual right

Eric Blair|7.18.07 @ 10:40PM|#

Jon H. writes: " The tax cuts payed for themselves"

Even the Bush administration's own economists don't make that claim.

___________________________________

I'm not sure where you are coming from. I assume everyone else here has introduced Jon to Milton Friedman and the robust economy that he inspired over the last 27 years since Ronald Reagan embraced Friedmanomics.

If anything has been left out please let me know. I'm new here.

|7.18.07 @ 11:39PM|#

I'm not sure where you are coming from. I assume everyone else here has introduced Jon to Milton Friedman and the robust economy that he inspired over the last 27 years since Ronald Reagan embraced Friedmanomics.

I think Jon H is one of about 2-3 hard core democrats that post here under various names...which include include

Edward
joe
Dan T
URKOBOLt

Perhaps we should make a list?

But that might be construed by hard core dems as Mcarthism...

Which means we definitely should make a list =)

|7.18.07 @ 11:58PM|#

hmmm after actually reading the article it would appear all the increased spending and hiring went mostly to security.

As libertarians it is fun to bash bush while he has the low poll numbers...but the US was attacked on US soil....hell in New York..

To compare numbers after an attack on US soil you would have to compare Bush with FDR.

Libertarian leaning Republican or compassionate conservative you would have to expect security spending to increase after 9/11.

|7.19.07 @ 7:12AM|#

" But the DNC list is about as much the government's business as how much nudity I watch on TV."

I beg to differ. One of the legitimate functions of a government is to enforce property rights, and telephone solicitation is an unauthorized use of my property. Until and unless it becomes legal for me to shoot telemarketers on sight, the DNC list is a fine way to handle the problem.

-jcr

Urkobold™|7.19.07 @ 9:08AM|#

THE URKOBOLD IS ASSUREDLY NOT A DEMOCRAT. WHERE DO YOU GET SUCH IDEAS?

|7.19.07 @ 12:01PM|#

I'm not sure where you are coming from. I assume everyone else here has introduced Jon to Milton Friedman and the robust economy that he inspired over the last 27 years since Ronald Reagan embraced Friedmanomics.

The Laffer curve doesn't take in consideration spending. The insignificant Bush tax cuts resulted in an insignificant increase in tax revenue. Not enough to compensate for the insane increase in spending.

Laffer and Friedman assumed there would be a reasonably sane fiscial policy.

|7.19.07 @ 2:09PM|#

The Laffer curve doesn't take in consideration spending. The insignificant Bush tax cuts resulted in an insignificant increase in tax revenue. Not enough to compensate for the insane increase in spending.

Laffer and Friedman assumed there would be a reasonably sane fiscal policy.

Last I checked revenues were at an all time high and projections put revenues rising faster then budget increases and recent revenue receipts are higher then projected...by some 40+ billion.

How is revenues growing faster then spending an "insane increase in spending".

|7.19.07 @ 3:38PM|#

"""Cutting taxes in conjunction with passing out federal credit cards to every sailor walking off the ship,"""

As Bill Maher said, "at some point the grown-ups have to sit down and pay the bills"


I want to give Robert the Hussain is dead and the JD's stance on gun ownership. However was Saddam's death worth 1/2 a Trillion dollars? Also, I don't know of any gun possession cases where the JD took that stance. Maybe just not charging people with federal gun crimes?

Personally I'd hate to see that ownership stance be wasted. That is the one thing I thought Bush did.

|7.19.07 @ 5:06PM|#

As Bill Maher said, "at some point the grown-ups have to sit down and pay the bills"

One analogy for government budgeting can be a households budget...but it isn't a very accurate one considering that households do not produce wealth....sure we can spend everything on pop-tarts and laundry detergent...but at the end of the day someone has to bring home a pay check.

A better one would be a business allocating resources....Bush's tax cuts allocated resources to wealth generation in the hopes of growing revenues. Considering the huge creation of wealth that precipitated after the tax cuts and the record breaking tax revenues that such growth produced one would have to find that this analogy is closer to Bill's.

Taxing the economy slows it down and slows down job creation, spending the money you earn from your job on your family's needs does not hamper your ability to keep bringing home pay checks.

|7.19.07 @ 5:07PM|#

Correction:

have to find that this analogy is closer then Bill's.

|7.25.07 @ 6:58PM|#

The Bush tender heart that keeps him from killing programs, his reluctance to veto, his accepting good faith promises from democrats are all charactor flaws. God, just give him 2 more justices [one for spare] and I'll forgive him a lot.