Federal regulations cost U.S. consumers and businesses an estimated $1.88 trillion in lost economic productivity last year, according to a new study from the Competitive Enterprise Institute (CEI).
"Many Americans complain about taxes, but regulatory compliance costs exceed what the IRS is expected to collect in both individual and corporate income taxes for last year - by more than $160 billion," wrote Clyde Crews, report author and CEI vice president for policy.
The report, "Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State," highlights the scope and cost of regulations found in the 77,687-page Federal Register, referring to them as a "hidden tax" of America's regulatory state.
"Rather than pay directly and book expenses for new initiatives, federal regulations can compel the private sector, as well as state and local governments, to bear the costs of federal initiatives" and can "enable federal direction of private-sector resources with comparatively little public fuss, rendering regulation a form of off-budget taxation."
Since 1993, some 90,836 new rules have been issued, and regulation enforcement alone cost the government $59.5 billion in 2014.
"If U.S. federal regulation was a country, it would be the world's 10th largest economy, ranking behind Russia and ahead of India," the report states. Economy-wide regulatory costs come out to "an average of $14,976 per household - around 29 percent of an average family budget of $51,100," though it's not paid directly by individuals.
The report found that some 60 federal agencies, departments and commissions, currently have 3,415 regulations in various developmental stages, far surpassing the number of laws passed by Congress.
"In 2014, agencies issued 16 new regulations for every law - that's 3,354 new regulations compared to 224 new laws," the report said.
Over six years, the Obama administration has averaged 81 major regulations per year, while the Bush administration averaged 62 major regulations annually over eight years.
The top six federal rulemaking agencies - the Departments of the Treasury, Commerce, Interior, Health and Human Services and Transportation and the Environmental Protection Agency - account for 48 percent of all federal regulations.
Regulations also undermine democracy in a way, as "federal agencies do not answer to voters," Crews writes. It's an effective way for the federal government to further agendas outside of the legislative system without needing explicit congressional approval.
"In a sense, regulators and the administration rather than Congress, do the bulk of U.S. lawmaking. Years of unbudgeted growth of the federal regulatory system are worrisome when no one can claim with assurance that regulatory benefits exceed costs," the report said.
Because regulations are unbudgeted, they receive too little attention in policy debates.
"Congress has shirked its constitutional duty to make the tough calls. Instead, it delegates substantial lawmaking power to agencies and then fails to ensure that they deliver benefits that exceed costs," the report reads.
This works out well for Congress, as it conveniently allows lawmakers to "escape accountability by blaming an agency for issuing an unpopular rule," according to the report.
