Regulatory Costs Soar

Expensive new federal rules


During the last four years, President Barack Obama occasionally has tried to cast himself as a deregulator, or at least as someone interested in slimming down and streamlining federal regulations. But the numbers tell a different story.

In 2011 Obama ordered an administration-wide regulatory review intended to rid the books of "outmoded regulations." Goals included "reducing costs and simplifying and harmonizing rules" as well as achieving regulatory goals in ways that are "more effective or less burdensome." In 2012 Cass Sunstein, former head of Obama's Office of Information and Regulatory Affairs, touted another executive order intended to "eliminate unjustified regulatory costs and to reduce burdens" through international regulatory coordination.

Here's what that looks like in practice: In 2012 Sunstein's office wiped regulations imposing a total annual burden of $2.5 billion from agency books. Meanwhile, the administration added $236 billion in new regulations.

That's the finding of a January 2013 report from the American Action Forum (AAF), a conservative policy shop led by former Congressional Budget Office Director Douglas Holtz-Eakin. The report finds that regulators had a banner year, with the projected cost of new regulations coming in substantially higher in 2012 than in any of the previous dozen years. 

In dollar terms, the Environmental Protection Agency led the charge with $172 billion in new regulations. ObamaCare and the Dodd-Frank financial regulation bill, meanwhile, piled on the paperwork. The AAF report says the health law resulted in the publication of paperwork requirements that will chew up about 44 million hours annually. The report estimates that the Dodd-Frank Wall Street Reform and Consumer Protection Act will result in about 32 million hours of new paperwork each year.

Those regulations are likely to affect small businesses the most, according to AAF regulatory director Sam Batkins. "Sometimes a big company might want a big regulatory overhaul," he told The Washington Post, "because they know they can absorb those new costs better than their competitors can."