Regulatory Costs Holding Steady Compliance With Federal Rules Costs $677 Billion Annually

As President Clinton wraps up his first term, regulation-watchers are trying to assess the cost and impact of the rules his administration has put in place over the past four years.

So far, the consensus seems to be that Clinton has been a middle-of-the-roader - not a fanatical regulator, but not Ronald Reagan, either. Through the rest of this decade, the cost of complying with federal regulations is expected to hold steady - about $677 billion annually, or 9 percent of gross domestic product throughout the decade.

But the Competitive Enterprise Institute, a pro-business think tank, says regulatory accountability should begin with Congress and the laws it votes for - not with the president or his regulatory lieutenants.

The institute explores this theme in an upcoming report, “Ten Thousand Commandments: A Policymaker’s Snapshot of the Federal Regulatory State.” The study, written by Clyde Wayne Crews Jr., avoids partisan rhetoric and focuses on how the country should regulate and who should pay the cost of the rules.

“The most important element of controlling the regulatory state is to make Congress directly accountable for every dollar of costs that agencies impose on the public, preferably by requiring Congress to vote to approve agencies’ final rules,” the report says.

And, to make spending on regulations “real” to the average American, he would factor them into the federal budget, instead of letting them lurk as faceless off-budget items. An honest budget would note, for example, that new rules costing $11.6 billion annually are expected to be imposed this year.

“It might make sense to add regulatory costs to the deficit to get a more realistic picture of unfunded government,” he said.

Many regulatory experts argue this is an impossible exercise because they believe there is no way to evaluate the indirect costs and benefits of rules.

Gary Bass, executive director of OMB Watch, a non-profit organization that monitors regulation, said rating regulatory performance is akin to ascribing a dollar value to the Washington Monument.

Legislation sponsored by Sen. Ted Stevens, R-Alaska, proposes to take a crack at it anyway, requiring the Office of Management and Budget to prepare an annual accounting statement on cumulative costs and benefits of all regulatory programs. OMB currently requires cost-benefit analyses of rules that impose costs of $100 million or more annually.

Congress now has the opportunity to review and reject rules and guidelines and hold up major rules for 60 days.

Instead, Crews says Congress should be given the opportunity to specifically endorse every significant regulation - rather than just reject ones it doesn’t like - creating a record on who voted for a regulatory program in the first place and ending what he calls “regulation without representation.”