Cost of Federal Regulation Exceeds $1 Trillion

A new Competitive Enterprise Institute (Washington, D.C.) report on federal regulation finds that the cost of federal regulations on consumers topped $1 trillion last year, nearly 10% of U.S. gross domestic product.

In “Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State,” author Clyde Wayne Crews, Jr. examines the whopping costs and burdens imposed by federal regulations. Among the report’s findings:

• Given that 2006 government spending reached $2.654 trillion, the hidden tax of regulation now approaches half the level of federal spending itself;

• Regulatory costs are more than quadruple the $248 billion budget deficit;

• The number of new regulations declined but is still well into quadruple digits--agencies issued 3,718 final rules, a 6 percent decline from 2005.

New regulations by federal agencies outpace actual laws passed by Congress, indicating that considerable lawmaking power is delegated to unelected agencies. While regulatory agencies issued 3,718 final rules, Congress passed and the president signed into law 321 bills in 2006.

Regulatory costs exceed the amount of wealth already extracted from Americans in the form of income taxes. Regulatory costs exceed the estimated 2006 individual income taxes of $998 billion and dwarf corporate income taxes of $277 billion. Regulatory costs exceed 2004 corporate pretax profits of $1.059 trillion.

The report urges a series of reforms to make the cost of regulation more transparent and accountable to the people. For example, Congress should commission a third-party review of the costs and benefits of regulations. And Congress should be required to vote on agency rules before they become binding.

For further information, contact the Competitive Enterprise Institute, a non-profit public policy organization dedicated to the principles of free enterprise and limited government, at

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