- NERA Economic Consulting study commissioned by MAPI found 2,183 federal regulations affecting manufacturing, of which 235 are considered "major" regulations with compliance costs of $100 million or more.
- The NERA study estimates that these regulations cost the economy from $265 billion to $726 billion a year in direct compliance costs.
- Over the next decade, NERA finds, regulations could reduce annual manufacturing output by up to 6%, and exports in 2012 by up to 17%.
Federal regulations are having a cumulative economic impact far in excess of their individual costs and are threating the competitiveness of U.S. manufacturing, NERA Economic Consulting warns in a new study commissioned by Manufacturers Alliance for Productivity and Innovation (MAPI).
In "Macroeconomic Impacts of Federal Regulation of the Manufacturing Sector," NERA looked at the cumulative impact of federal regulations issued since 1981 that affect the general economy and the manufacturing sector in particular. The study found 2,183 regulations affecting manufacturing, of which 235 are considered "major" regulations with compliance costs of $100 million or more.
The NERA study estimates that these regulations cost the economy from $265 billion to $726 billion a year in direct compliance costs.
Over the next decade, NERA finds, regulations could reduce output by up to 6%, or from $200 billion to $500 billion. The study found that manufacturing exports in 2012 could be 6.5% to 17% lower than they would be without the regulations.
MAPI President and CEO Stephen Gold told a press conference that 90% of regulations affecting manufacturing are considered "non-major" and their costs are not tracked by the federal government, but that the cost of these regulations "may be comparable" to the costs of the major regulations. All these rules interact, he said, and create an economic burden much greater than the sum of the individual rules. For a country struggling to create economic growth and increase employment, Gold said, the current regulatory system amounts to "shooting yourself in the foot."
The study found that the pace of regulations was picking up. During the Clinton Administration, the federal government issued an average of 36 major regulations annually. In the Bush administration following it, the number of major regulations issued each year averaged 45. But during the Obama administration, that number has grown to 72.
