Bush's Regulatory Kiss-Off: Obama's Assertions to the Contrary, the 43rd President Was the Biggest Regulator since Nixon
de Rugy, Veronique, Reason
WHEN BARACK OBAMA was running for president, he made no secret about his plan to "restore common-sense regulation"--read: increase regulation--by closing the regulatory loopholes he thought the Republicans had opened. Deregulation, he argued repeatedly, is the source of evil. Much like Franklin Delano Roosevelt during the Great Depression, Obama offered a sweeping, ambitious agenda: new financial regulations, new labor regulations, new energy regulations, and more.
Today Obama is the president-elect of the United States. With Democratic majorities in Congress, he will have tremendous power to push his "reforms." And unlike FDR before him, President Obama won't have to create a regulatory system from scratch in order to increase government control of people's lives. His groundwork was laid by George W. Bush.
Some people still seem to think Republicans take a hands-off approach to regulation, probably because the party is always quick to criticize the burdens regulations place on businesses. But Republican rhetoric doesn't always match Republican policy. In 2007, according to Wayne Crews of the Competitive Enterprise Institute, roughly 50 regulatory agencies issued 3,595 final rules, ranging from boosting fuel economy standards for light trucks to continuing a ban on bringing torch fighters into airplane cabins. Five departments (Commerce, Agriculture, Homeland Security, Treasury, and the Environmental Protection Agency) accounted for 45 percent of the new regulations.
Since Bush took office in 2001, there has been a 13 percent decrease in the annual number of new rules. But the new regulations' cost to the economy will be much higher than it was before 2001. Of the new rules, 159 are "economically significant," meaning they will cost at least $100 million a year. That's a 10 percent increase in the number of high-cost rules since 2006, and a 70 percent increase since 2001. And at the end of 2007, another 3,882 rules were already at different stages of implementation, 757 of them targeting small businesses.
Overall, the final outcome of this Republican regulation has been a significant increase in regulatory activity and cost since 2001. The number of pages added to the Federal Register, which lists all new regulations, reached an all-time high of 78,090 in 2007, up from 64,438 in 2001.
Even more worrisome is how agencies implement these rules. In a recent study tided "Homeland Security and Regulatory Analysis: Are We Safer Yet?" Jerry Ellig and Jamie Belcore of George Mason University's Mercatus Center (where I work) looked at the regulatory analysis behind the Department of Homeland Security's regulations. They found that the agency conducted shoddy, incomplete regulatory analysis; never tried to find regulatory alternatives; and didn't bother arguing that there was a market failure or a systemic problem that might warrant government intervention. According to Homeland Security's own estimate, its rules cost the economy more than $4 billion a year; the actual cost is likely to be much higher.
President Bush deserves most of the blame for this regulatory expansion. While the president does not have to sign new rules before they're implemented, he does implicitly approve them. In addition, he signed hundreds of laws commanding federal agencies to produce new regulations. One is the Sarbanes-Oxley Act of 2002, which established new or enhanced standards for all publicly held companies and accounting firms in the United States. Another is the McCain-Feingold campaign finance reform law, which imposed new restrictions on campaign spending and prohibited unregulated contributions ("soft money") to national political parties. …