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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.

Tetra Images Tetra Images/NewscomTetra Images Tetra Images/NewscomDuring 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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  • steve sturm||

    I'm not defending the rules, nor the rule-making process, but I think it's misleading to claim that regulations cost us $1.9 trillion.

    I agree the cost of a company to comply with Rule X or Rule Y is a real cost to that company. But that money isn't disappearing from the economy, it's going into the pockets of those hired to do the paperwork, the government workers who monitor compliance, etc. And while I don't know for sure, I have a hunch that CEI is looking to quantify only the initial spend.

    And yes, I would rather the company spend its money on other initiatives.

  • Robert||

    TL;DR, but I bet CEI's calcul'n is not merely of paperwork costs. Those are probably small compared to opp'ty cost of biz that was foregone because the regs prohibited it or made it too costly.

  • KevinP||

    If you use a bomb to destroy a building, should the cost of the bomb materials and bomb maker's labors offset the cost of the building?

  • sarcasmic||

    But that money isn't disappearing from the economy, it's going into the pockets of those hired to do the paperwork, the government workers who monitor compliance, etc.

    Textbook broken window fallacy.

  • steve sturm||

    No it isn't. I'm not arguing that the cost of complying with regulations is a good thing as I would be if I was indeed making the broken window argument. I'm arguing that the money spent fixing the broken window can't be excluded as if that money wasn't spent, as if it disappeared from the economy. Furthermore, the fallacy applies to money being spent to replace something that is destroyed (the window), which isn't the case here.

  • NotAnotherSkippy||

    Which is textbook broken window fallacy. The money to fix the window isn't disappearing from the economy either; it's just misallocated.

  • MarkLastname||

    And while the money itself may not leave the economy, the labor and resources used to fix the window do, having been diverted from another use. That's the loss.

  • rudehost||

    Exactly! If we created a law requiring every single American to spend 100% of their time digging ditches using a teaspoon and paid them their current wages we wouldn't lose any money from the economy. We just wouldn't have any cars, food, water, electricity or any of the other stuff money can buy. Money is a medium of exchange. That sticks around. The goods that make that money useful are lost because we are redirecting people from productive activity producing useful things to bureaucratic box checking.

  • sarcasmic||

    Seen and the unseen. The money that replaces the broken window (seen) could have been used for something productive (unseen) that would have created wealth. The money that goes to comply with regulations (seen) could have been used for something productive (unseen) that would have created wealth. In both cases wealth is lost due to the opportunity cost of doing something that produces no new value.

  • steve sturm||

    Again, I'm not arguing that we're not worse off than if we spent less money on compliance, you all are making arguments I agree with.

    But it's misleading, in making an argument about the overall economic impact of regulations, to count only the expenditures associated with compliance.

  • sarcasmic||

    But it's misleading, in making an argument about the overall economic impact of regulations broken windows, to count only the expenditures associated with compliance replacement.

  • Sevo||

    Beat me to it.
    This guy has obviously never read Bastiat.
    All the glazers in the world would love if HE set economic policy.

  • Crusty Juggler aka "Chad"||

    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.

    But he's so dreamy.

  • Rhywun||

    there were 3,853 separate rules created by executive branch regulatory agencies

    You can be sure that's 3,853 separate ways to find yourself at the end of the barrel of some cop's gun. I don't understand how any of these rules are legal.

  • Citizen X - #6||

    Because fuck you, that's how.

  • CptNerd||

    But if we didn't have all these oppressive rules and regulations, we'd all choke to death on poison air and water, and children would be working in mines! CHILDREN!

  • loveconstitution1789||

    ,i>"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."
    Plus, Trump is at least trying to use EOs to limit bureaucratic rules.

  • Palin's Buttplug||

    The Con Man ran on the promise he would cut two regulations for every one he created so that should be -897 rules.

    Of course he is just spouting shit again.

    No tax cuts, no ACA repeal, no wall, no NAFTA rewrite, no Muslim ban - the riff-raff should be getting pissed off but they have been thoroughly conned.

  • Steve-O||

    It's like oral rape compared to anal rape.

  • chemjeff||

    I would rather not have any regulatory agencies at all, and have every regulation be in the form of a law passed by Congress.

    BUT...

    if we are going to have regulatory agencies at all, why do they have to work for the executive branch? Why can't they work for the legislative branch instead? You put congresscritters at the head of the regulatory agencies. That way they are accountable to the voters in some tangible sense.

  • Robert||

    That's how it's commonly done in parliamentary systems. But the US Const. has a prohib'n on an individual's holding more than 1 US office at a time. That could probably be worked around, as by having Congressional staffers do it instead, but I'm sure there'd be some separation-of-powers objection. Because theoretically the reg agencies aren't lawmakers, just deciding how to enforce the statutes.

  • Robert||

    Of course the procedures to change any of those regs will take up pages in the Federal Register too—probably as many pages as it took to put them in—so the size of the Federal Register isn't so accurate as a meter of drag on biz.

  • Bubba Jones||

    this is all Repuglican's fault! If congress had been more reasonable, Obama wouldn't have had to rely on regulation!

    /s

  • Quo Usque Tandem||

    In MI the House just passed legislation to keep state rules from exceeding federal rules. The reasoning being that in things like environment and workplace safety federal standards are plenty high enough. Not to mention that un-elected bureaucrats should not have such power over persons to whom they are not accountable There may be exceptions but this will require the State to show "clear and convincing evidence" in order for this to happen.

    A Democrat opposed the legislation, saying that "regulations that are put in place federally are a floor and not a ceiling" and that the government "should be able to further regulate if we deem necessary."

    I think that pretty much explains it.

  • Ankah||

    On one hand it will promote less regulations, but not as much as you think, since there will be a regulation in place. So if the Feds say lower x by y% and MI had it at z%, you still need to abide by a % reduction.

    I am still very confused at how the report reached some of these numbers. For example, when they say intervention, do they mean the salaries of the inspectors? Are they adding cost of necessary compliance such as cleaning up an oil spill from a pipeline? Are the adding the costs of an inspector going about enforcing weights and measures?

    Both numbers of cost and total regulation are very scary, but after reading the first chapter (and that is all I read), I do not get a sense of how some of these numbers are being reached, and I think that should be part of the discussion.

  • Sevo||

    So I stopped at a golf-course club-house for lunch yesterday, and was treated to CNN on the tube (silent with scroll). They were rambling on about how Trump is a poopyhead with such neutral 'witnesses' as Obo's head of the EPA.
    That particular imbecile made the following claim:
    'Enviro regs are good, and the proof is that the economy hasn't tanked since cars first had to meet emission standards'.
    I decided to eat outside.

  • Palin's Buttplug||

    Just stick to Bratfart.com where you belong.

  • Dallas H.||

    So edgy! So clever! Bask in the glow a rapier wit, everyone!

  • Palin's Buttplug||

    Who are you? And that worthless sarcasm is all you have posted?

  • Citizen X - #6||

    I don't know who Dallas H. is but he's already contributed more to Hit'n'Run than you ever have, shreek.

  • Diane Reynolds (Paul.)||

    Dallas is from Cleveland.

  • CptNerd||

    Starting your new quota of postings for the month?

  • Sevo||

    Palin's Buttplug|6.1.17 @ 11:37AM|#
    "Just stick to Bratfart.com where you belong."

    You stupid shit, I assume you're referring to Brietbart, which, as it happens I've never seen or listened to.
    As a fucking ignoramus, it seems you must project your stupidity upon others.
    Hint: Go fuck your daddy, turd.

  • Diane Reynolds (Paul.)||

    This goes back to the questions that people asked themselves during the election-- about voting for Hillary, the known quantity, or voting for Trump, the undisciplined crazy guy on Twitter. At least in this one area, it's pretty clear what the right choice was.

  • Unicorn Abattoir||

    Leave the job open, and try again in 4 years?

  • SomeGuy||

    vote for shit or shit or a socialist statist fuck, or a mediocre politician.

    Yep shit was the option 90% or so Americans choice and Shit 2 beat shit 1. Awesome.

    I was in Japan or South Korea at the time so I couldn't vote but if i was I would have voted intelligently and voted for mediocre over this group think BS of voting for shit v shit.

    Humanity fails again...shocker

  • Palin's Buttplug||

    Not one regulation named.

    Naming a building is no doubt a "regulation" to a wingnut.

  • Diane Reynolds (Paul.)||

    Withdrawing from the Paris Climate Change agreement would be one regulation. You know, to name just one.

  • Palin's Buttplug||

    It would be one.

    Corporate America (minus the coal retards) want to stay in it though.

    Coal should just die fast anyway via the market.

    Fuck coal and fuck WV/Ky.

  • Diane Reynolds (Paul.)||

    Fuck coal and fuck WV/Ky.

    That's exactly what Hillary and Obama said!

  • MarkLastname||

    When someone uses the term 'corporate America' as though there were some other land where all the corporations live and plot the emmiseration of the workers, it generally means they sniff glue.

  • CptNerd||

    Fuck you.

  • CptNerd||

    Meant as a reply to PBP.

  • creech||

    Point taken. What, in this article, could I use to argue for fewer regs? I don't know if $1 trillion or $100 million is the cost associated with not allowing chemical companies to pour their untreated waste into the rivers. Even most libertarians will agree with certain regs that restrain such behavior. It isn't helpful to put all regulations into one pile of things to be thrown out.

  • Palin's Buttplug||

    Hayek argued for pollution regs. But he fails the LP Purity Test too.

  • Diane Reynolds (Paul.)||

    The EPAs 'navigable waters' bullshit could be viewed as a pollution regs. My guess is Hayek was referring to the low-hanging fruit stuff.

  • MarkLastname||

    Clearly, that means he'd support banning fracking.

  • CptNerd||

    One regulation for that, require all companies that process using river water to put their outlets upstream from their intakes.

  • Fuck You - Cut Spending||

    This is why Miller is a more popular beer in Chicago than Budweiser.

  • SomeGuy||

    Did you pay up yet?

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