Regulation Week Overshadowed by Debt Talks

The fate of America’s fiscal future, the debt limit hike, and the appropriate size of government is currently sucking the political oxygen out of the nation’s capital.  Perhaps rightly so, but another unnoticed milestone was reached last week. 

Halfway through 2011, administrative agencies are on pace to impose more than $100 billion in new regulatory costs on states, businesses, and consumers.  Judging by the torrid pace set by regulations last year (the most expensive on record according to Professor Susan Dudley) this year will be another record-setter.

In spite of public attempts by the administration to preach reform, the numbers indicate that the regulatory throttle is still at full speed.  Some top-line highlights:

• Pages: the federal government issued 37,974 pages halfway through 2010; this year President Obama has met that mark and exceeded it by 572 pages (an entire ream of paper).

• Proposed Rules: a sharp increase of 273 from this year over last year.

• Final Rules: final rules have jumped steadily as well, with a total of 1,787 halfway through 2011, up 85 over the 2010 figure.

Indeed, 2011 has been a busy year for regulatory activity.  The 2011 numbers are highlighted by a flood of Dodd-Frank regulations (139 rulemakings with a cost of more than $1.2 billion).

The regulatory highlights (or lowlights) for the year have been major EPA activity.   Although EPA has delayed some major rules, its total agenda still retains hefty costs for the industry and energy consumers (everyone).

Six months through 2011 and EPA has imposed more than $23.7 billion in proposed or final compliance costs.  These figures don’t even include its controversial greenhouse gas regulation program, so look for costs to increase during the remainder of the year.

The most expensive item on the regulatory docket to date is an EPA proposed rule governing hazardous air pollutants from coal and oil fired electric generating units.  At $10.9 billion, it has induced a wave of controversy within the industry and “final action” isn’t scheduled until November.

Also notable, new standards for renewable fuels (ethanol) that EPA admits could cost consumers more than $3.1 billion in increased food costs.  From the Federal Register: “EPA estimated a $10 per person per year increase in food costs due to the total annual impact of the RF2 program.”  With roughly $6 billion in federal subsidies for the ethanol industry and more than $3 billion in food costs, Americans are shelling out close to $10 billion to fund a profitable industry.

In total, 6 months of regulations portend approximately $100 billion in compliance costs, $2.4 billion in Dodd-Frank burdens, and more than 600 significant federal rulemakings, all while the administration praises its “unprecedented” regulatory reform.

In light of these dire numbers, how is Congress addressing the flood of new compliance costs?  Legislation, hearings, and an attempt to use the modern-day legislative veto to strike down net neutrality.

This week the House will hold hearings on expanding spectrum, reining in independent agencies, FDA reform, onerous National Labor Relations Board rules, and Education’s new measure attacking for-profit colleges, to name just a few. 

And as soon as FCC publishes its controversial (and illegal) net neutrality order in the Federal Register, Congress will likely move forward with its attempt to rescind the rule.  The formal resolution to disapprove (H.J. Res. 37) already passed the House with a strong bipartisan majority.

This flurry of legislative activity is promising but any true reform attempts will take a willing executive and comprehensive independent agency reform.  With $100 billion in new costs and more than 38,000 pages, it appears the nation does not have a willing executive.