Picking Up the Pace?
When asked what the top challenges facing the Obama administration and the Congress were, 76.4% of executives told the NAM/IndustryWeek Survey of Manufacturers last December that the burden of government regulations needed to be reduced.
Since 1981, the federal government has issued 2,183 regulations affecting manufacturing, according to a study by NERA Economic Consulting commissioned by the Manufacturers Alliance for Productivity and Innovation (MAPI). Of that total, 235 are considered "major" regulations, with compliance costs of $100 million or more. The study estimates that these regulations cost the economy from $265 billion to $726 billion a year in direct compliance costs.
| Manufacturing Bears the Largest Regulatory Burden (In 2009 Dollars. 1=highest burden; 5=lowest burden) |
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The study also warned that the pace of regulation is picking up. It noted that the Clinton administration issued an average of 36 major regulations annually, the Bush administration averaged 45, and the Obama administration is averaging 72 major regulations each year.
Just in January, according to the American Action Forum, the federal government added $12 billion in costs and nearly 12 million hours of paperwork burden. In February, the group warned, rules such as the transparency report final rules under the Affordable Care Act and EPA regional haze requirements could add $15.8 billion in cost burdens. At that rate, AAF estimated, the government could add $138 billion in regulatory costs in 2013.
While business groups have warned that the Obama administration is unleashing a regulatory "tsunami," the Center for Effective Government (formerly OMB Watch) has called it more of a "soft wave." The group analyzed data from the OMB's Office of Information and Regulatory Analysis (OIRA) and found that in the first 42 months of each administration, the Bush administration in its first term published 1,060 final rules, compared to 1,771 in the first Clinton term and 1,002 in the first Obama term.
The center found that the Obama administration had indeed issued more significant regulations but that nearly half (97 of 200) were required by legislation or judicial order. And it noted that because of the lengthy rulemaking process, many regulations extend over several administrations.
For example, EPA's greenhouse gas rule was first proposed in 1999. In 2003, the Bush administration's EPA refused to issue a finding of endangerment to the public, which would have required rulemaking under the Clean Air Act. In 2007, the Supreme Court overruled the EPA decision and a subsequent ruling by a federal appeals court required EPA to make another determination. In 2009, the Obama EPA ruled that greenhouse gases endangered public health. EPA then issued two economically significant regulations implementing the ruling.
