When the federal administrative state began its growth a century ago, few likely imagined the tangle of rules it would yield and how those would envelop the economy and society. Over the past three years, there have been some reversals in this regard, such as a slowdown in the issuing of new rules and some rollbacks of existing ones, and a series of executive actions related to general regulatory process reform, reforming the executive branch itself, and streamlining internal agency processes and timeliness of regulatory approvals and removing undue burdens generally.
The extensive executive actions undertaken aimed at liberalization have been both broad-based and sector-specific to areas such as financial regulation, antiquities and national monuments, offshore resource access, education, health care, agricultural biotechnology, and more. But some of Trump’s executive actions since taking office have added costs, such as emphasizing trade restrictions, anti-dumping, “buy American” agendas, and more.
Excess regulation is largely driven by the longstanding delegation by Congress of its lawmaking power to executive branch regulatory agencies. The limited cost–benefit analysis currently undertaken by agencies relies largely on agency self-reporting and covers only a fraction of rules. Addressing that situation effectively will require the restoration of Congress’ duties under Article I of the Constitution rather than “mere” administrative law reforms. In the meantime lawmakers should require thorough tracking and disclosure of regulatory costs and effects, and perform periodic housecleaning.
The 2020 edition of Ten Thousand Commandments is the latest in an annual series that examines the scope of the federal regulatory state. This report contains seven major elements:
1. A bulleted summary of highlights.
2. An overview of ways the Trump administration has attempted to stem the flow of regulations and roll back old ones.
3. A detailed discussion of Trump’s own regulatory impulses -- implemented, pending, and potential -- that undermine his own regulatory effort.
4. An overview of the scope of the regulatory state, including a taxonomy of categories and instances of unmeasured costs of regulation and intervention, and depictions of its appraised size compared with federal budgetary components and GDP.
5. An analysis of trends in the numbers of rules and regulations issued by agencies, based on information provided in the Federal Register and in the Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions. This section also provides a brief survey of memoranda, notices, and other “regulatory dark matter,” and examines implementation of Trump’s “one-in, two-out” process for new regulations and its limitations.
6. Recommendations for reform that emphasize disclosure and improving congressional accountability for rulemaking.
7. An appendix containing historical tables of regulatory trends over past decades.
Some bulleted highlights from the report follow.
• Apart from sector-specific executive orders and memoranda, there are six prominent ways the Trump administration has streamlined regulation so far:
1. Elimination of 15 rules and one guidance document via the Congressional Review Act (CRA);
2. Delay or withdrawal of 1,570 of Obama administration rules in the pipeline;
3. Multi-pronged streamlining of permitting for pipelines, bridges, 5G broadband, rural broadband, and other infrastructure;
4. Agency restraint in initiating large, significant rulemakings;
5. Continued progress on the presidential requirement that agencies eliminate at least two rules for every one issued;
6. Steps toward addressing agency guidance documents and other sub-regulatory decrees.
• In fiscal year 2019, the administration’s ratio for significant rules out to significant rules in was 1.7 to 1. Employing all rules eliminated, the ratio was 4.3 to 1, still meeting goals of Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs.”
• Agencies’ stated priorities and “inventories” of rules signal some warning signs for Trump’s deregulatory agenda. While the Trump administration can be said to have technically met the goal of implementing a “one-in, two-out” process for federal regulations over the past three years taken as a whole, the longer-term horizon plainly shows agencies poised to reverse this and to issue substantially more regulatory actions than deregulatory ones.
• Some warning signs are of Trump’s own creation. President Trump’s regulatory streamlining is being offset by his own favorable comments and explicit actions toward regulatory intervention in the following areas:
- Antitrust intervention
- Financial regulation
- Hospital and pharmaceutical price transparency mandates and price controls
- Speech and social media regulation
– Tech regulation
– Digital taxes
– Bipartisan large-scale infrastructure spending with regulatory effects
– Trade restrictions
– Farming and agriculture
– Subsidies with regulatory effect
– Telecommunications regulation, including for 5G infrastructure
– Personal liberties: health-tracking, vaping, supplements, and firearms
– Industrial policy or market socialist funding mechanisms (in scientific research, artificial intelligence, and a Space Force)
– Welfare and labor regulations (job training, the new family leave)
• Given the limited available federal government data and reports, as well as contemporary studies -- and the federal government’s failure to provide a regularly updated estimate of the aggregate costs of regulation -- this report employs a placeholder estimate for regulatory compliance and economic effects of federal intervention of $1.9 trillion annually. This is for purposes of context and rudimentary comparison with federal spending and other economic metrics. This report also presents an outline of the vast sweep of intervention and policies for which costs are disregarded.
• The burden of regulatory intervention is equivalent to over 40 percent of the level of federal spending, projected to be $4.6 trillion in 2020.
• Regulatory costs of $1.9 trillion amount to 9 percent of U.S. GDP, which was estimated at $21.54 trillion in 2019 by the Commerce Department’s Bureau of Economic Analysis.
• When regulatory costs are combined with estimated federal FY 2019 outlays of $4.447 trillion, the federal government’s share of the entire economy reaches 30 percent (state and local spending and regulation would add to that).
• If it were a country, U.S. regulation would be the world’s eighth-largest economy (not counting the U.S. itself), ranking behind Italy and ahead of Brazil.
• The regulatory hidden “tax” is equivalent to federal individual and corporate income tax receipts combined, which totaled $1.914 trillion in 2019 ($1.698 trillion in individual income tax revenues and $216 billion in corporate income tax revenues).
• Regulatory costs rival corporate pretax profits of $2.063 trillion.
• If one assumed that all costs of federal regulation and intervention flowed all the way down to households, U.S. households would “pay” $14,455 annually on average in a regulatory hidden tax.
• Calendar year 2019 ended with 2,964 final rules in the Federal Register, which was the lowest count since records began being kept in the 1970s and is the only sub-3,000 tally ever.
• During calendar year 2019, while agencies issued those 2,964 rules, Congress enacted “only” 105 laws. Thus, agencies issued 28 rules for every law enacted by Congress. This “Unconstitutionality Index”—the ratio of regulations issued by agencies to laws passed by Congress and signed by the president—highlights the entrenched delegation of lawmaking power to unelected agency officials. As it happens, the average ratio for the past decade has also been 28.
• In 2017, Trump’s first year, the Federal Register finished at 61,308 pages, the lowest count since 1993 and a 36 percent drop from President Barack Obama’s 95,894 pages, which had been the highest level in history. The 2019 Federal Register tally rose to 70,938 pages. However, Trump’s rollbacks of rules—and as noted there are far fewer rules overall—also necessarily add to rather than subtract from the Register.
• Of the 3,752 regulations in the Agenda’s pipeline (completed, active, and longterm stages), 192 are “economically significant” rules, which the federal government describes as having annual economic effects of $100 million or more. Of those 192 rules, 33 are deemed deregulatory for purposes of Trump Executive Order 13771 (11 at the completed stage, 20 at the active stage). 644 affect small businesses.
• Since 1993, when the first edition of Ten Thousand Commandments was published, agencies have issued 107,712 rules. Since the Federal Register first began itemizing them in 1976, 204,802 final rules have been issued.
• President Trump issued 47 executive orders in 2019 (after 63 in 2017 and 35 in 2018). From the nation’s founding through the Obama administration, more than 15,285 executive orders have been issued. President Obama issued a total of 276, similar to President George W. Bush’s 291. Prior to the 20th century, most presidents had no more than a few dozen. In contrast, Woodrow Wilson issued 1,803, Coolidge issued 1,204, and Franklin D. Roosevelt issued 3,467. Presidential memoranda add to this total.