Regulation

Report: Obama's Final Year Included a Mind-Boggling, Record-Breaking Number of Federal Regulations

Federal regulations drained $1.9 trillion (with a "t") out of the American economy last year.

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Tetra Images Tetra Images/Newscom

During the final year of the Obama administration, federal regulations drained more than $1.9 trillion (about $15,000 per family) out of Americans' wallets, and the number of rules created by the federal government grew to an all-time high.

It's no surprise that President Donald Trump's election was due, in part, to his promise to "drain the swamp" and slash the federal regulatory state, which had grown to never-before-seen levels during the last 16 years under the watch of both Democratic and Republican administrations. The latest annual regulatory report from the Competitive Enterprise Institute, a free market think tank based in Washington, D.C., provides a sense of the scale of that federal regulatory state—and, perhaps more importantly, provides a benchmark against which to measure Trump's efforts to cut red tape.

The size of the federal regulatory burden is almost too large to conceptualize, but if you're willing to try, here's a few numbers you should know. The $1.9 trillion price tag for all federal regulations and interventions during 2016 is roughly equal to the $1.93 trillion in personal and corporate income taxes collected by the IRS, according to the CEI report. The Federal Registry, that behemoth of a book that annually tracks the growth of the federal leviathan, had more than 95,000 pages added to it in 2016, far outpacing the previous record (set just one year earlier) of 80,260 pages. Including last year's record-breaker, 13 of the 15 longest registers in American history have been authored by the past two presidential administrations (Barack Obama owns seven of the top eight, with George W. Bush filling in most of the rest).

So far, Trump is on pace to fall well short of those totals in 2017—and that's just fine.

"This year's report offers an important benchmark that will allow us to measure President Trump's commitment to cutting red tape against his predecessors," says Clyde Wayne Crews, CEI's vice president of policy and the author of the annual Ten Thousand Commandments report released Wednesday. "If you compare President Trump's first four months to the same period under President Obama in 2016, Obama issued 1,164 rules, while the Trump administration issued 897 rules. That's a 23 percent decrease."

That's along the same lines as what Bloomberg identified last week, in a piece highlighting how agency rule-making has ground to a halt in the new administration. According to Bloomberg's analysis, just 39 new rules have been submitted to the Office of Information and Regulatory Affairs since Jan. 20 when Trump took office. By comparison, Obama had submitted 118 rules by the same point in his first year in office.

Combined with Trump's efforts to roll-back federal regulatons—like using the Congressional Review Act to repeal some Obama-era rules, and the appointment of high level officials who are skeptical of government regulation—the new administration's efforts to limit the growth of new federal rules are laudable. Trump's plans for "systemic reform," of regulatory policy will have lasting effects beyond one presidency, Andrew Bremberg, the director of the White House's Domestic Policy Council, told Politico.

Still, as Matt Welch pointed out here last week (and in the cover story for last month's edition of the print magazine), the growth of federal regulations are largely the result of Congress handing over too much rule-making authority to federal agencies, and failing to hold agencies accountable for the rules they create.

The new CEI report highlights that Congress passed 214 laws last year, while there were 3,853 separate rules created by executive branch regulatory agencies.

If the Trump administration wants to make regulatory reforms stick, that relationship will have to be adjusted. One possible way to do that would be to press for passage of the REINS Act, which cleared the House earlier this year and was approved by a Senate committee last week. The proposal would require every new regulation that costs more than $100 million to be approved by Congress. As it is now, executive branch agencies can pass those rules unilaterally.

There's almost no doubt that Trump's first year in office will produce fewer federal regulations than what we've seen in recent years (under both Bush and Obama). Credit where it is due, but that's just one way to judge the new administration. Real change will require more.

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