regulatory burden

America’s Ever-Expanding Regulatory Swamp

Maybe I’m biased because I mostly work on fiscal policy, but it certainly seems feasible to come up with rough estimates for the damage caused by onerous taxes and excessive spending.

On a personal level, for instance, we have a decent idea of how much the government takes from us and we know the aggravation of annual tax returns. And we tend to have some exposure to government bureaucracies, so we’re familiar with the concept of wasteful spending.

But how do you quantify the cost of regulation and red tape? Well, here are some very large numbers to digest.

Americans spend 8.8 billion hours every year filling out government forms.

The economy-wide cost of regulation is now $1.75 trillion.

For every bureaucrat at a regulatory agency, 100 jobs are destroyed in the economy’s productive sector.

The Obama Administration added $236 billion of red tape in 2012 alone.

In other words, the regulatory burden is enormous, but I worry that these numbers lack context and that most of us don’t really grasp how we’re hurt by government intervention.

So let’s look at some additional data.

Hey, Barack Obama, businesses are moving overseas because of a terrible tax climate made worse by you

There’s been a lot of talk lately from President Barack Obama and administration officials about “economic patriotism.” They say that corporations shouldn’t be allowed to move overseas to escape paying the corporate income tax.

“Even as corporate profits are higher than ever, there’s a small but growing group of big corporations that are fleeing the country to get out of paying taxes,” President Obama said at a stop in Los Angeles on Thursday. “They’re keeping, usually, their headquarters here in the U.S. They don’t want to give up the best universities and the best military and all the advantages of operating in the United States. They just don’t want to pay for it. So they’re technically renouncing their U.S. citizenship.”

Earlier this month, President Obama suggested that Congress (read: Republicans) lack “economic patriotism” to work with his administration on issues the country faces. Treasury Secretary Jack Lew dropped the same term in a letter to Senate Finance Committee Chairman Ron Wyden (D-OR) as he urged Congress to pass legislation to end corporate inversions.

“What we need as a nation is a new sense of economic patriotism, where we all rise or fall together. We know that the American economy grows best when the middle class participates fully and when the economy grows from the middle out,” Lew wrote in the letter to Wyden. “We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes.”

Report: Americans face $1.8 trillion in annual regulatory costs

 Ten Thousand Commandments

One of the most dangerous, least often talked about threats of the governmental regulatory machine is how much of our money is engulfed in the regulatory process, putting the country deeper into debt.

The Competitive Enterprise Institute has just released its annual report on the general state of U.S. federal regulations and what is known as the “hidden tax” of the U.S. regulatory state known as the Ten Thousand Commandments.

Because regulations are proposed and enacted without allowing for a substantial review of their cost-benefit and its open discussion, Americans are hit with the consequences of the growth of the regulatory state where it hurts the most: their wallet.

“Federal agencies crank out thousands of new regulations every year,” says CEI Vice President for Policy Wayne Crews, “but we have little information on the cost or effectiveness of most of them.” According to Crews, one of the main issues with this process is the lack of transparency since few of us have access to reliable sources of information on what the regulations hope to accomplish.

The cost of the regulatory mess we find ourselves in adds hundreds of billions to our debt, which is why this report is so important. CEI Vice President for Policy warned the public that action is needed.

There was a huge win for the Internet yesterday, but now crony senators are pushing the Obama-backed online sales tax again

Fresh off a victory in the House of Representatives to keep the Internet access tax-free and promote innovation online, consumers may now have to brace for another push in the Senate for the so-called “Marketplace Fairness Act,” a crony measure backed by brick-and-mortar retailers that would allow states to impose online sales taxes:

Senate supporters believe they have a perfect vehicle [for the online sales tax bill]: the Internet Tax Freedom Act, a relatively uncontroversial measure, which sailed through the House on Tuesday, that would extend a long-standing ban on state and local taxes on Internet access.

“Why wouldn’t we?” Sen. Mike Enzi (R-Wyo.), a longtime supporter of online sales tax legislation, said when asked if he planned to attach the Marketplace Fairness Act to the bill. “They’re a perfect fit.”

Enzi and several other senators released their new bill on Tuesday, which would attach the online sales tax measure to a 10-year extension of the Internet freedom bill. The House passed a permanent version of the online access bill on Tuesday.

Mary Landrieu is trying desperately to distance herself from Obama’s anti-coal regulations

Sen. Mary Landrieu (D-LA) realizes that her only hope for reelection is to pull the wool over the eyes of Louisiana voters to hide her support of President Barack Obama’s agenda. So, naturally, she visited a coal plant, the industry at which the rules are aimed, in her state on Tuesday to try to distance herself from the Obama administration’s cap-and-trade scheme:

“The goal for me is not clean. It’s an important part of the equation, but it is not the goal,” Landrieu told press after touring the coal-fired power plant Monday afternoon.

“The goal is [energy] independence. The goal is security. The goal is reliability. And then also, as clean as possible,” she added.

Last week Landrieu told reporters that the one piece of the new rules she thinks is “wise” is the degree of flexibility the Environmental Protection Agency (EPA) is affording states when designing their own implementation plan.
[…]
“It’s really important for us in America to begin thinking about America being energy independent and energy secure,” Landrieu said. “No more imported oil from countries we don’t agree with or share their values. No more relying on outsiders to provide some essential components of our economic structure. That’s one of the reasons why I’m not going to be able to support the EPA regulation that just came out.”

It’s politically convenient for Landrieu to oppose the EPA’s anti-coal regulations, which seek to reduce carbon emissions in the United States by 30 percent compared to 2005 levels by 2030. And while it’s true that she supports Keystone XL and offshore drilling, Landrieu’s record on EPA regulation leaves a lot to be desired.

Obamacare regulatory burdens outweigh benefits

The heavy regulatory and paperwork burdens that Obamacare has brought to businesses and states is not worth the costs, according to a new study by the American Action Forum, a conservative think tank.

While most have focused on the premium and deductible increases that many Americans are seeing when they sign up for a health plan, the study, authored by Sam Batkins, takes a look at another aspect of the law that hasn’t received nearly as much attention.

“From a regulatory perspective, the law has imposed more than $27.2 billion in total private sector costs, $8 billion in unfunded state burdens, and more than 159 million paperwork hours on local governments and affected entities,” wrote Batkins. “What’s more troubling, the law has generated just $2.6 billion in annualized benefits, compared to $6.8 billion in annualized costs.

“In other words,” he continues, “the [Affordable Care Act] has imposed 2.5 times more costs than it has produced in benefits.”

To put the paperwork hours into perspective, Batkins compared the burden under the Dodd–Frank Wall Street Reform and Consumer Protection Act to that of Obamacare. “At more than 159 million paperwork hours, the ACA is in a class by itself,” he noted. “To date, Dodd-Frank, an equally transformational law, has imposed ‘only’ 60 million hours of paperwork.”

The study, for example, notes that Americans will spend 7.5 million hours complying with the individual mandate and business owners will have to spend 40.2 million hours dealing with reporting requirements.

Federal Reserve report: Obamacare’s negative impact on employment

In mid-January, the Federal Reserve released its monthly Beige Book, which offers a wide-ranging look at commentary on economic conditions in each of the central bank’s 12 regions. While it’s mostly mundane, the Heritage Foundation found some key details buried in the report that relate to Obamacare and its affect on employment:

The Beige Book finds businesses repeatedly stating that Obamacare and rising health care costs have held back the labor market:

Paul, McConnell introduce Economic Freedom Zones Act in Senate

Sen. Rand Paul (R-KY) formally introduced a measure on Wednesday to empower impoverished cities by giving them and their residents a break from the onerous federal tax and regulatory burdens which keep them from prosperity in tough economic times.

The Economic Freedom Zones Act of 2013 would lower personal and corporate income tax rates in cities, counties or zip codes that meets certain criteria, such as those that have either filed for Chapter 9 bankruptcy and an unemployment rate of 1.5 times the national average. The measure would also provide federal regulatory relief, including exemptions from onerous EPA rules that result in the loss of federal highway and transit funds and Davis-Bacon prevailing wage work requirements.

“In order to change our course, we must reverse the trend toward more Big Government by ending the corporate welfare and crony capitalism that limits choice and stifles competition,” said Paul in a statement. “We must encourage policies that will lift up the individual, allow for the creation of new jobs, improve the school system and get these communities back to work.”

“The answer to poverty and unemployment is not another government bailout; it is simply leaving more money in the hands of those who earned it. The Economic Freedom Zones Act of 2013 will do just that,” he added.

WaPo: White House delayed environmental, healthcare rules before 2012 election

Government agencies were told to delay enacting environmental and healthcare rules, among others, according to a report from Washington Post, for fear of the role the regulations could play in the 2012 presidential election:

The White House systematically delayed enacting a series of rules on the environment, worker safety and health care to prevent them from becoming points of contention before the 2012 election, according to documents and interviews with current and former administration officials.

Some agency officials were instructed to hold off submitting proposals to the White House for up to a year to ensure that they would not be issued before voters went to the polls, the current and former officials said.

The delays meant that rules were postponed or never issued. The stalled regulations included crucial elements of the Affordable Care Act, what bodies of water deserved federal protection, pollution controls for industrial boilers and limits on dangerous silica exposure in the workplace.

Coalition urges Senate to pass REINS Act

A broad coalition of conservative and free market groups are urging members of the Senate to support a measure — the “Regulations from the Executive in Need of Scrutiny Act,” better known as the REINS Act — that would require congressional approval of executive-level agency rules that will have a costly economic impact.

“This bill restores legislative control and accountability to the federal regulatory process by providing for meaningful congressional oversight over new regulations agencies impose on the American people,” wrote the coalition of organizations to individual members of the Senate.

“It requires both houses of Congress to approve any proposed ‘major rule’ — that is, any rule likely to affect the economy by $100 million or more — before such a rule goes into effect,” the letter continues. “The REINS Act already passed the U.S. House of Representatives by a sizeable margin. It is now time for the Senate to follow suit.”

Policymakers and bureaucrats tend not to be concerned about the implications of rules created by executive-level agencies, like the EPA, for example. But these regulations create a costly compliance burden for consumers and business, which are already facing tremendous strains on their finances as the economy has limped along after the recession, with next to no accountability and only marginal oversight.

In March, the Competitive Enterprise Institute released its annual regulatory snapshot, Ten Thousand Commandments, which found that compliance cost with these rules and regulation cost $1.8 trillion in 2012, roughly $14,678 per American family. Those compliance costs, the coalition letter notes, “was more than half of all federal outlays ($3.4 trillion)” for that year.


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