federal regulations – USA Gov Policy

A major obstacle often cited by those seeking to engage in business or other activities within the United States is the cost, in time and money, of complying with existing federal regulations as well as keeping track of new ones or alterations in those already existing. According to a White House analysis during FY 2016, as the Obama Administration drew to a close, executive agencies promulgated 85 major rules. But that’s only the tip of the iceberg.

According to a Forbes study by Clyde Wayne Crews Jr. , by the last workday of 2016 The printed version of the Federal Register had reached 97,110 pages, by far an all-time record. That dwarfs, Crews noted, 2015’s count of 80,260 pages, and it shattered the 2010 all-time record of 81,405 by 15,705 pages.

The Competitive Enterprise Institute reports that “Federal regulation cost Americans $1.9 trillion in 2017, or nearly $15,000 per U.S. household—more than Americans spend on any category in their family budget except for housing. While the Trump administration has made noteworthy progress toward reining in the expansion of new rules, more substantial reform will need to come from Congress in order to significantly reduce this breathtaking government burden.”

Among the key findings of the report:

Federal regulations and intervention cost Americans $1.9 trillion in 2017.
Federal regulation is a hidden tax that amounts to nearly $15,000 per U.S. household each year, more than Americans spend on any category in their family budget except for housing.
In 2017, 97 laws were enacted by Congress during the calendar year, while 3,281 rules were issued by agencies. Thus, 34 rules were issued for every law enacted.
If it were a country, U.S. federal regulation would be the world’s eighth-largest economy, ranking behind India and ahead of Italy.
Many Americans are concerned about their annual tax burden, but total regulatory costs exceeded the $1.88 trillion the IRS collected in both individual and corporate income taxes in 2017.
Some 67 federal departments, agencies, and commissions are currently working on 3,209 new regulations in various stages of development.
The five most active rulemaking entities– the Departments of Commerce, Defense, Transportation, Treasury, and the Environmental Protection Agency–account for 1,359 rules, or 43 percent of all proposed regulations currently under consideration.
The 2017 Federal Register contained 61,308 pages, the lowest count since 1993 and a 36 percent drop from Obama’s 95,894 pages in 2016, the highest level ever recorded.

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A Committee for Economic Development report found that, overall, “Government regulation of economic and social activities permeates our lives…regulations often are imposed on individuals and organizations with too little thought or analysis of what is gained in comparison with the losses incurred in time, money, indecision, and productivity…Further, the growth of government involvement in the market system sometimes constrains our ability to achieve fundamental economic and social goals.”

A 2017 Chamber study found that “federal regulations and their infrastructure are growing and have a disproportionate impact on small business and free enterprise in America. Federal regulations alone are estimated to cost the American economy as much as $1.9 trillion a year in direct costs, lost productivity, and higher prices. The costs to smaller businesses with 50 employees or fewer are nearly 20% higher than the average for all firms. The rising burdens of federal regulations come amid a falling pace in new business formation. In 1980, Americans were creating some 450,000 new companies. In 2013, they formed 400,000 new firms, despite a 40% increase in population. Our three-decade slump in firm formation fell to its lowest point with the onset of the Great Recession; even with more businesses being born today, America’s startup activity remains below pre-recession levels.”

Ben Goad and Julian Hattem wrote in the hill that “President Obama [was responsible for] a dramatic expansion of the regulatory state that will outlast his time in the White House…Washington, for better or worse, is reaching deeper than ever before into the workings of society.“It would be difficult for anyone to pretend that this isn’t a high-water mark in terms of regulation,” said Douglas Holtz-Eakin, a former director of the nonpartisan Congressional Budget Office…”

The Trump Administration has attempted to reverse the substantial growth in the federal regulatory state, issuing, within the second month of the new Administration, Executive Order 13771 which warrants that for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.

According to the U.S. Chamber “…the deregulatory actions taken [by the Trump Administration] … stand out by historical standards…Since 2009, [there were] about 14 new major regulations each year, with estimated costs totaling about $12 billion annually. In comparison, in fiscal year 2017, there were only three new regulations put on the books while 67 deregulatory actions were completed, and the total annualized cost of new regulations was negative $570.4 million. We should keep in mind that most years, regardless of the party in office, the federal government issues many costly new rules, adding billions per year to the cumulative burden, and that avoiding those additional new rules, let alone reducing the cumulative total, is a big win for American business. Going forward, we should expect even more of what we saw in 2017 as the larger scale regulatory reform efforts, such as those at the EPA, begin bearing fruit. Regulatory reform is hard work, and achieving meaningful reform and eliminating harmful rules takes time…we should see good results in the next few years.”

The White House is breaking all records when it comes to over-regulating the American people. Research by the Competitive Enterprise Institute (CEI) indicates that the Administration is on pace to enact 89,416 regulations in 2016. In mid-October, the total had already reached the 70,318 mark.

CEI notes: “six of the seven all-time high federal register page counts have happened under the Barack Obama administration. So this year is set to be a massive record-breaking year in terms of rulemaking, at least according to Federal Register heft. It is quite likely the Federal Register could top 90,000 pages.”

Washington’s addiction to regulation is more than just a nuisance. The CATO institute asserts that “It is widely recognized that excessive regulation is unnecessarily killing jobs.”

The Daily Signal found that “job-creating entrepreneurs in the United States have been dispirited by the scope and cost of escalating red tape…Since 2009, the expansion of Uncle Sam’s regulatory control has been one of the prime culprits in America’s startling decline in economic freedom and overall competitiveness. Each new edict has meant a new government bureaucracy that entrepreneurs and producers must navigate. Worse, the trend of overregulating our economy has also bred cronyism and tarnished our free-market system. As reported in the 2015 Index of Economic Freedom, an annual study that benchmarks the quality and attractiveness of the entrepreneurial framework across countries, the United States remains stuck in the second tier economic freedom rank of the “mostly free,” with its business freedom score plunging to the lowest level since 2006. This increased regulatory burden, aggravated by favoritism toward entrenched interests, has notably undercut America’s historically dynamic entrepreneurial growth. A 2014 Brookings Institution analysis shows that with business exits now exceeding new business formations, entrepreneurial dynamism in the United States has been steadily dwindling. In light of the excessive and costly regulatory environment, it is not surprising that America’s ongoing economic recovery has been far from dynamic. Fewer Americans can prosper in this overregulated economy.”

The cost of compliance with the tidal wave of regulatory mandates is overwhelming. CEI estimates that in 2015, regulatory-related expenses were approximately $1.88 trillion, 10% of the entire American GDP and over 5 times the cost of federal corporate income taxes that year.

Essayist and publisher Markham Shaw Pyle’s observation was recently quoted in Inc.: “If the power to tax is the power to destroy, the power to regulate is no less so. For the life of me, I cannot tell you why our bloated bureaucracies of city, state, and fed seem to have it in for entrepreneurs and small business. But they apparently do…If the U.S. and the world is ever to escape the torpidity lingering from the Great Recession, to say nothing of bailing out the indebted entitlement state, it must do so on the success and vitality of creative free enterprise. Yet, everywhere I look I see businesses groaning under unnecessary government intrusion that is antithetical to business health.”

A Heritage study reports that “The White House, Congress, and federal agencies routinely ignore regulatory costs, exaggerate benefits, breach legislative and constitutional boundaries, and increasingly dictate lifestyle choices rather than focusing on public health and safety. Absent substantial reform, economic growth and individual freedom in America will continue to suffer.”

Regulations have been imposed on the most mundane and trivial acts of daily life, and not just for businesses. Writing in the Wall Street Journal, Ragheed Moghrabi reports that while working for a U.S. company overseas, he was compelled by IRS regulations to fill out needless tax related paperwork for his son, a fifth grader, when he attempted to open a bank account in which the youngster would store his allowance.

The question is, how to stop the seemingly endless cycle of constantly mounting regulations.

The Heritage study observed that the Obama Administration has recognized the unpopularity of its actions, but has chosen to hide those actions rather than reform them. This can be seen in the timing of its agenda releases, which have occurred with regularity at precisely the times when public and journalistic attention is most likely to be light. Christmas weekend, the day before Independence Day, and Memorial Day weekend have all been used to dump agenda releases.

As previously reported by the New York Analysis of Policy and Government, U.S. Congressman Tim Walberg (R-MI), U.S. Senator Joni Ernst (R-IA), and U.S. Senator Ron Johnson (R-WI) have introduced bicameral legislation, the Midnight Rule Relief Act, to prevent a surge in costly federal regulations as a President’s term comes to a close. According to Rep. Walberg (R-Michigan) “Given the Obama administration’s tendency to overregulate and overreach, the American people can expect to see a surge of last minute regulations in the President’s waning days in office…This bill will hold outgoing administrations in check.

The legislation would:

Establish a moratorium period beginning on the day after the election through the inauguration on new regulations that cost the economy $100 million or more annually, or result in major cost or price increases for consumers, industries, or government agencies.
Include exceptions for rules that are necessary for imminent health or safety threats, enforcement of criminal laws, and national security.
Exempt rules that are limited to repealing existing regulations.

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In 2015, Ernst also co-sponsored the REINS Act, which would hold elected officials accountable to approve new major rules & regulations. The REINS Act would:

Designate a ‘major rule’ as any rule or regulation that the Office of Management and Budget (OMB) determines to have a yearly economic impact of $100 million or more.

Require passage by a roll call vote in Congress and presidential signature before any new ‘major rule’ can be enacted.

Give Congress the ability to block burdensome new rules and regulations imposed by federal agencies.

Restrain the power and broad discretion of federal agencies to impose significant ‘major rules’ without congressional oversight or public discussion.

Pave the way for transparency and accountability within the federal rulemaking process.

Quick Analysis

Ukraine’s Frozen Conflict

As we approach winter in the northern hemisphere, the war in Ukraine is beginning to resemble a “frozen conflict” from many perspectives. Ukrainian President Volodymyr Zelensky recently told the media he hopes the war will end faster once President-elect Trump takes over in January. Opinions in Moscow, however, differ from that of the Ukrainian leader. Russian President Vladimir Putin argues that the North Atlantic Treaty Organization (NATO) needs to exclude Ukraine from joining in “exchange” for peace. If it does not, he says, then no end to the war is in sight. So far there is no Christmas solution. Several NATO countries, according to Vladimir Socor of the Jamestown Foundation, are tentatively considering “coalitions-of-the-willing” to provide security for Ukraine outside of the formal NATO framework. There is, however, no collective mechanism today under which such an arrangement is viable. According to the NATO Charter, while Ukraine is a NATO partner country, it may not join as a full member since it has not fulfilled the requirements for membership. That has not stopped NATO and allies from continuing “to provide Ukraine with unprecedented levels of support, helping to uphold its fundamental right to self-defence,” according to the organization. Socor says that keeping Ukraine out of NATO will not advance peace with Russia. Waiting for a peace settlement, he suggests, would only serve to encourage Moscow to continue the war indefinitely. Although the Biden Administration officially withdrew its support for Ukrainian membership in 2021, NATO maintains an “open door” policy toward membership-seeking countries. The current White House position led the way for European states to oppose Ukraine’s membership saying that a decision should be delayed until “conditions are met.” Biden pushed for changing “open door” to a “bridge” metaphor. It is not intended as an across-the-board NATO policy and has been implemented in the past on a case-by-case basis, says Socor. “The alliance’s open-door policy was not fully insulated from Russia’s non-statutory blocking power, and NATO-aspirant countries’ path toward membership was not always irreversible.” Russia has successfully blocked states like Georgia from joining, first in 2008 and again after the war in Ukraine began in 2014. Russia recognizes the value add of Ukraine to NATO is enormous and that Kyiv has a better case than some other nations. Putin’s invasion was, in part, intended to foreclose that option. By 2021, Moscow was pushing hard to maximize its war objectives, which included further annexations of Ukrainian territory. A main goal for Putin was, and is, to ensure there is no Ukraine left to join NATO. As President-elect Trump prepares to assume office in January, he is faced with the historical challenges presented by the war. Post-conflict security guarantees were the center of several proposals made during the 2023 military stalemate. The incoming Trump Administration has yet to outline how it intends to handle the Russia-Ukraine war. Analysts in Washington believe that the new Administration will expect its European allies to guarantee the majority of Ukraine’s security needs. As we approach 2025, several European nations have acknowledged that they do not view Ukraine as eligible for NATO membership as it would draw the organization into the middle of the conflict. Others want to wait until the war is over or pending a “peace” settlement before considering Ukrainian membership. Socor reports that some “influential voices” are suggesting that “Kyiv should join NATO after “freezing” the war along a stable armistice line, de facto accepting Ukraine’s partition, with NATO security guarantees applying de jure to the government-controlled territory only.” This would mean starting accession talks soon with the actual talks to commence only after a ceasefire is in place. Trump arrives in Washington at a time when Putin’s hybrid strategies of war in Ukraine have eviscerated commonly-held differences between war and peace. “Absent a political consensus in NATO over Ukrainian membership, certain European allies, including France’s President Emmanuel Macron, are holding informal consultations about post-conflict security guarantees to Kyiv by NATO members outside of NATO’s framework,” according to the Jamestown Foundation. The Biden Administration downplayed the discussions on possible forms of military assistance and defense industry cooperation by sending only an Assistant Secretary of State. For a European peace to hold the Trump Administration would need to formally extend the United States’ nuclear deterrence to Ukraine. Options under discussion in Europe include a “coalition of the resolute” to deploy forces to Ukraine as part of a possible armistice package, deterring further Russian attacks, says Secor. European officials are also debating, without any agreement, whether its military forces could perform non-combat logistical roles to free Ukrainian forces to fight. None of the possible courses of action has moved forward as all eyes are waiting on the incoming Trump Administration for clues about its intended level of support for a NATO framework and other non-NATO proposals. Daria Novak served in the U.S. State Dept.