Did you know that the federal government imposes regulations on frozen cherry pies, which dictate how many cherries must be included? Or that it dictates how French dressing gets made?
Those and others equally bizarre and intrusive rules may soon be history, as part of President Trump’s determined effort to deregulate the economy.
That’s the good news.
The bad news is that despite Trump’s best efforts, the regulatory state is still mammoth and largely unstoppable.
This is made clear in the latest annual report on the federal regulatory state by the Competitive Enterprise Institute — 10,000 Commandments — which is the definitive guide to the scale, scope and trends in federal regulations.
The massive size of the regulatory state is almost incomprehensible.
The report finds that, even with Trump’s regularly rollbacks, regulatory compliance costs are $1.9 trillion a year.
To put that in perspective, federal regulations account for 9% of the economy. If the U.S. regulatory state were its own country, it would be bigger than the entire economy of Canada, and one of the 10 largest in the world.
U.S. environmental regulations alone — which impose an annual cost of $394 billion — are bigger than the economies of Israel, Denmark, Finland, New Zealand, and 20 other nations in the OECD.
On a per-household basis, regulations cost each household an average of almost $15,000 a year on compliance costs. That’s nearly twice the cost of food, and almost as much as the average household spends on housing.
The regulatory state is so enormous that it costs taxpayers $71.4 billion just to have the federal government administer all its own rules and regulations. That’s more than the federal government spends on the Department of Homeland Security.
Yet, except for those federal costs, none of the burden imposed by federal regulations shows up in any budget document. It’s simply an enormous, hidden cost of government, largely imposed by unelected career bureaucrats.
To be sure, Trump has made real progress in slowing the advance. The administration blocked 1,579 Obama administration rules in the pipeline that would have further crippled the economy. It streamlined the federal permitting process for infrastructure projects.
The administration also far exceeded Trump’s order for agencies to repeal two existing rules for every new one enacted — last year the ratio was 12 to 1. The number of new rules coming out of federal agencies has slowed as well.
The CEI report also notes that, “The Trump administration has arguably taken more steps than any predecessor to address the proliferation of significant guidance documents and other sub-regulatory decrees or ‘regulatory dark matter’ that can have a concrete regulatory effect.”
These efforts, the CEI report says, will save nearly $50 billion this year.
But as important as these changes have been, they’re still akin to whistling in a hurricane.
As the report notes, the Obama administration alone added $122 billion to the annual cost of federal regulations, which means Trump isn’t even halfway to undoing the damage by his predecessor.
The report’s author, Clyde Wayne Crews, says that, “The reality is that the administrative state is alive and well, powering ahead, and the president alone can only do some very limited streamlining.”
He goes on to warn that some of Trump’s progress is threatened by his “own regulatory impulses on issues ranging from antitrust enforcement to trade restrictions to food and drug matters, and more.”
In any case, making real inroads against this mammoth and largely unaccountable bureaucracy will require more than a determined president can deliver. It will require congressional action that strips agencies of their regulatory authority, overturns laws that granted agencies virtually unchecked powers, and that impose real accountability on regulators.
Even in a Republican administration, the chance of such wholesale reform is limited. It’s nonexistent with the House in Democratic hands.
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