"The good life is one inspired by love and guided by knowledge."

Thursday, September 15, 2011

Regulation Nation~An Army Of Regulators

Regulation Without Representation

The United States Government is the biggest government in the world.  In terms of size U.S. revenues, expenditures, deficits and the amount of debt that we have accumulated.

The Code of Federal Regulations (CFR) has 81,405 Pages Of Taxes and Fees. In 2010 unelected federal regulators wrote 78% more coded regulatory laws than were written and passed by the 111th Congress. Federal agencies wrote 3,573 coded laws, while our elected officials in Congress wrote 217 Bills that were passed and signed into law by the President.

A mind boggling 4,225 laws are placed in the federal regulatory pipeline to become law and 224 are considered economically significant, wielding an estimated economic impact of $22 billion dollars annually.

Of the 58 Agencies busy writing laws as complicated as our tax code, the biggest producers of regulatory excesses emanate from the departments of the Treasury, Health and Human Services, Commerce, and Agriculture, along with the Environmental Protection Agency.  These 5 agencies are responsible for 1,820 rules, or 43% of all rules in the Unified Agenda pipeline.

58 Agencies and an army of dedicated unelected federal employee regulators every day are busy writing exacting complicated rules.  Rules with punishing fines and penalties that impact the lives and employment of every American and effect the hiring decisions and profits of every sector of American Commerce and Industry.

Unlike private industry, that annually makes a cost benefit analysis of their operation, these agencies are not subject to cost benefit analysis that would review their economic impact by a third party.

From an article in The American, "Industry Has Spoken...Will The President Listen", ..."On February 7, 2011, Chairman Issa released a 2,000-page PDF of responses from 113 organizations. We dug into the file, and even we were surprised: While complaints about Occupational Safety and Health Administration (OSHA) regulations, the tax code, and provisions of the new healthcare law were expected, the clear focus of most responses was environmental regulation. As the Small Business and Entrepreneurship Council warned:

The general regulatory thrust of the Administration with regard to energy and the environment will lead to less energy, higher energy prices, a disincentive to manufacture in the U.S. and massive job loss. Our energy sector is being forced into a regulatory vice—caps and restrictions are being imposed on how much America can use and produce, while excessive regulation on energy use and the industry are driving costs higher. Anti-energy activists in the regulatory bureaucracies seem accountable to no one. Unfortunately, small business owners and their workforce will bear the brunt of higher costs and widespread job loss if initiatives at the Environmental Protection Agency move forward..."

And from the same article, ..."the Association for Manufacturing Technology did not cite specific regulations, but rather explained that:  'in many cases, regulations are excessive, confusing and so costly that R&D and business development suffer as a result, hindering job growth and stifling innovation. This is particularly true with regulations originating from the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA), where it is obvious that regulators know little or nothing about manufacturing.'..."

From The Competitive Enterprise Institute, Ten Thousand Commandments, 2011, page 11, ..."As noted in the introductory summary, taxation and regulation can substitute for each other because regulation can advance government initiatives without using tax dollars. Rather than pay directly and book expenses for new programs, the government can require the private sector—as well as state and local governments—to pay for federal initiatives through compliance costs.

Because such regulatory costs are not budgeted and lack the formal public disclosure of federal
spending, they may generate comparatively little public outcry. Regulation thus becomes a form of off-budget or hidden taxation..."

Regulatory reforms placed by the Legislative Branch of government on agencies to police themselves will not rein in the regulatory state. However making Congress directly accountable to voters for the costs that are imposed on the public written by anonymous bureaucrats would promote more accountable regulation.

The road to control regulation is for voters to require Congress to vote on agencies’ final rules before such rules become binding on the public.

From a study conducted by The Phoenix Center For Advanced Legal & Economic Public Policy Studies, ..."In this POLICY BULLETIN, we quantify the impact on GDP and job growth of reductions in
the regulatory budget. Using econometric methods, we estimate that reductions in the federal regulatory budget have sizable effects on both GDP and jobs. A 5% reduction in the regulatory budget, which equals about $2.8 billion in spending, increases GDP by roughly $75 billion and the number of jobs by about 1.2 million annually. A 10% cut in the regulatory budget adds $149 billion to GDP annually and expands employment by 2.4 million jobs in each year. In recent years, however, the size of the regulatory budget has risen sharply, with the Obama Administration proposing numerous new regulatory agendas. This expansion in the regulatory budget is demonstrated here to be a drag on the economy and job creation. Each regulator (or employee of a regulatory agency) costs the American economy, at the margin, $6.2 million in economic output and about 98 private sector jobs each year. Accordingly, if policymakers wish to stimulate jobs and reduce federal spending, then responsibly trimming the regulatory budget may be a viable option."

No matter how you look at the current size and scope of our Federal Government's regulation, it absolutely is not what the Founders of this great nation had in mind.

1 comment:

  1. You're up Melody... I'll comment later, bit tired..