Regulations imposed by the Obama administration are the most expensive in American history, according to a new report by the Heritage Foundation. These countless rules and provisions—requirements that aren’t passed by elected officials but instead implemented by bureaucrats as they enforce Congressional laws—increased private sector regulatory costs by $122 billion annually, and they continue to cost the U.S. economy severely under the Trump administration. (In contrast, the George W. Bush administration increased the private sector’s regulatory burden by $68 billion, or roughly half of the increase seen in the Obama era.)
The $122 billion figure may shatter records, but it’s part of a growing trend that took off in the 1960s. During the end of the Eisenhower administration (1952-1960), the combined budget for all regulatory agencies totaled only $533 million ($3.4 billion in today’s dollars), and little more than 57,000 people were employed by the agencies. Today, the combined annual budget of regulatory agencies’ is a staggering $70 billion, and the federal government employs over a quarter million people full-time.
This means that over the past 58 years, after adjusting for inflation, government spending on regulations has increased 20-fold.
Scott Rasmussen, editor-at-large for Ballotpedia, argues that the collective distrust of the federal government began to rise alongside the growth in the regulatory state. Surveys haven’t showed a majority of Americans trust the federal government in 45 years—around the same time that the number of regulations began to grow.
Writing in Forbes and USA Today, Susan E. Dudley and Glenn Reynolds contend that the regulatory growth may have also discouraged American ingenuity, pointing to a serious slump in innovation following the regulation explosion in 1970. Studies also suggest that the increase in federal regulations have reduced economic growth by a massive 0.8 percent every year. Taken cumulatively, the U.S. economy could have been 25 percent larger today—adding as much as $13,000 more to the income of every American.
Not all regulations are bad, of course. But somewhere in the tome of 23,627 new regulations formed under the Obama administration alone, our country may have hit the point of diminishing (regulatory) returns. As Megan McArdle writes in Bloomberg, one regulation may be “painless [but] a million of them hurt.”
For more on how federal regulations are influenced by special interests to discourage competition at the public’s expense, see CRC’s video short on “The Harms of Subsidies and Regulatory Capture,” narrated by Dr. Steven J. Allen, here: