Blowing the Whistle on Regulatory Sprawl

Article excerpt


President Bush and Congress will eventually answer to taxpayers for the $2 trillion federal budget. But who answers for the $860 billion 8 percent of GDP that federal regulations now cost on top of official federal outlays?

Released Tuesday, our annual survey "Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State," finds regulatory spending equivalent to more than one-third of the entire federal budget itself a larger burden than the entire federal budget back in the 1960s. It's greater than Canada's GDP ($701 billion in 2000) and even greater than pretax corporate profits of $699 billion. But regulatory costs draw less popular furor because, unlike income taxes, they are often hidden in the prices of consumer goods.

In today's economy, we badly need a new way of thinking about and getting control of the burgeoning regulatory state.

The Federal Register, where new rules are published daily, hit an all-time record high of 75,606 pages this past year (up from 9,562 in 1950, 20,036 in 1970, and 49,795 in 1990). In the pipeline are now 4,187 rules at various stages of completion. Five agencies are responsible for more than half of this torrent: the Environmental Protection Agency and the Departments of Transportation, Treasury, Agriculture and Interior.

Recent proposals have included: workplace slip-and-fall hazard and indoor air-quality mandates from the Occupational Health and Safety Administration; labeling of sausage casings and exported caviar from the U.S. Department of Agriculture; acceptable ingredients for bathroom grout from the EPA; smoke alarm location requirements for prefabricated homes from the Department of Housing and Urban Development; and proposed bans of frowned-upon backyard play sets under consideration by the Consumer Product Safety Commission. The Transportation Department is busy with rules on daytime running-light glare, door retention and brake-hose reliability standards, side and roof crashworthiness, and radiator safety caps.

Many such rules are well intended. Others are questionable. But voters' connection to those who regulate is severed: Congress takes credit for popular regulatory initiatives, but can then blame agencies for costs.

Regulatory reform during the Bush administration has a role to play in economic recovery. Phasing out inefficient rules, making regulatory costs as transparent as direct taxes, and making Congress directly responsible for those costs, are crucial to economic health. …