Federal Regulatory Spending Reaches a New Height: An Analysis of the Budget of the United States Government for the Year 2000

Abstract

The administrative costs of federal regulation are budgeted to reach an all-time high of $19.8 billion in 2001, according to the Center for the Study of American Business at Washington University in St. Louis. This follows an estimated 8.2 percent increase in 2000. Staffing at the federal regulatory agencies is forecasted to grow to almost 132,000 in 2001 - also a new high and a 2 percent jump from this year. Federal Regulatory Spending Reaches a New Height: An Analysis of the Budget of the United States Government for the Year 2001 analyzes projected spending and staffing for the 54 regulatory agencies as proposed in President Clinton's eighth budget. The $19.8 billion price tag to administer federal regulations in 2001 is a 4.8 percent increase over 2000. In current dollars, this is the highest level of spending ever projected. After adjusting for inflation, the data translate to a 2.7 percent increase. If these forecasts hold out, regulatory spending during the Clinton presidency will grow by more than 22 percent, while the number of people needed to run the federal regulatory apparatus would increase by 5 percent. In 2001, only four agencies are scheduled to decrease spending on regulatory activity; 41 agencies will have increased budgets; nine agencies' budgets will remain the same. In addition, the president's budget is forecasting the largest number of federal regulatory employees in our nation's history - 131,983. The CSAB report divides the regulatory agencies between and regulation. Regulatory programs designed to deal with health, safety and environmental issues are designated as social regulation. This category includes agencies such as the Environmental Protection Agency, the Drug Enforcement Administration and the National Labor Relations Board. The more traditional, industry-specific form of regulation is referred to as economic regulation. Agencies in this category include the Federal Communications Commission, Federal Deposit Insurance Corporation and Federal Trade Commission. Nearly 79 percent of administrative costs of federal regulation are for social programs. Agencies in this category that are slotted for the biggest spending increases in 2001 include the Food and Drug Administration, Occupational Safety and Health Administration and the Equal Employment Opportunity Commission. Agencies administering economic regulations will enjoy some big increases, too. Those expecting more than a 10 percent gain are the Commodity Futures Trading Commission, Federal Communications Commission and the Department of Justice's Antitrust Division. Agencies that primarily perform taxation, entitlement, procurement, subsidy and credit functions are excluded from the CSAB report. This includes agencies such as the Internal Revenue Service, the Social Security Administration, and the Department of Defense. CSAB has tracked the size and cost of the federal regulatory agencies for over 20 years. Warren's analysis of the Clinton Administration's budget for 2001 shows that federal regulation in America - after a slight decline in the mid-1990s - has resumed a substantial upward growth trend.