The Cost of Federal Regulations? Not Backyard Barbecue Banter

The approach of summer brings to mind cool drinks and backyard barbecues, but for some analysts in Washington, the battle over costs versus benefits of federal regulations is only getting hotter.

The latest charge, from the Regulatory Studies Center at the George Washington University, is a study finding that regulatory spending has increased more than 20-fold in the last 58 years.

In the final year of the Dwight Eisenhower administration, which was fiscal year 1960, regulatory agencies employed a little more than 57,000 people and spent $533 million—equivalent to $3 billion in 2009 dollars—the study found.

By comparison, President Barack Obama in February submitted his final, FY 2017 budget to Congress, proposing to employ almost 279,000 people at regulatory agencies and spend $70 billion—equivalent to $61 billion in 2009 dollars—the study found.

Every year, Susan Dudley, director of the center, and Melinda Warren, director of the Weidenbaum Center Forum at the Washington University in St. Louis, examine the on-budget costs of regulation.

In real, inflation-adjusted terms, if his budget is adopted, Obama will have increased regulators' budgets by 18.8 percent since he took office in 2009, the study said. And, if this year’s budget is adopted, staffing will have increased by 8.4 percent over his two terms, it said.

Money pile

Is Obama an overzealous, massive regulator? Or, cautions Amit Narang, regulatory policy advocate at Public Citizen, is a little more perspective in order?

“The study would greatly benefit from some balance and context,” Narang said in an e-mail to Bloomberg BNA.

For starters, it would be more useful if the study also included what the public is getting in return for these budgetary costs, namely the regulatory benefits that improve the lives of Americans every day, Narang said.

“For example, it’s not very illuminating to look at just tax revenues and ignore how those taxes are spent to benefit the public,” he said.

The study also misses some important context, such as how much the economy has increased in size and complexity over the same period, Narang added.

“No one should expect that Eisenhower-era staffing levels would be fit to oversee and regulate a 21st century economy,” he said.

The study is available here.