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188.6 Million Hours of EPA Paperwork

Sam Batkins of the American Action Forum (AAF) has a new report [1] about the rising paperwork burden imposed by the Environmental Protection Agency. So far, 2016 has been a relatively quiet year for big new regulations at the agency—but the EPA is still managing to make compliance more difficult. This year, Batkins writes, Americans will spend a record 188.6 million hours doing EPA paperwork. That’s an increase of one-quarter just since 2009.

Batkins reports that the typical salary of a compliance officer is $33.26, implying these requirements cost north of $6 billion. A skeptic might say that in a nation of 319 million people, we’re talking about maybe $20 per capita. But EPA paperwork is just one tiny part of the regulatory state—and Batkins’s new report is just one tiny part of a growing effort at conservative and libertarian think tanks to document the growth of regulation, quantify the toll it takes on the economy, and explore ways of addressing the problem.

The big picture is stupendous. The Obama administration alone has added more than $100 billion ($300 per person) to the annual cost of regulation, half of it through the EPA, as the Heritage Foundation noted in May [2] using federal agencies’ own estimates. In total, each year regulations cost us nearly $1.9 trillion, according to the Competitive Enterprise Institute’s annual “Ten Thousand Commandments” [3] report; that’s $6,000 per person and slightly more than is collected from personal and corporate income taxes. A recent study [4] from the Mercatus Center said the economy would have been 25 percent bigger in 2012—a difference of $13,000 per capita—if we’d held regulations at their 1980 level, thanks to the snowballing effects of economic growth.

Want to dive into the nitty-gritty details of regulation? AAF has a tool called Regulation Rodeo [5] that allows users to see the regulations passed each year and how much they cost, and to sort them by the agency that enacted them and the industry to which they apply. The Mercatus Center has a more academic database called RegData [6], with which its scholars have calculated the FRASE Index [7], an estimate of how regulation affects each state.

If there’s a problem with these efforts, it’s that they often give short shrift to whatever benefit regulations are supposed to harness. Those who defend these measures can simply say: sure, regulation is expensive, but it’s worth it. Would you really eliminate all regulations, even for $6,000 a year—or return to the level of regulation we had in 1980, when hardly anyone was even talking about global warming or climate change [8]?

Indeed, many agencies themselves monetize the costs and benefits of regulations, naturally finding the benefits to outweigh the costs. A report [9] from the Office of Management and Budget last year rounded up these estimates for “major” regulations over a ten-year period, finding that “In 2010 dollars, aggregate annual benefits are estimated to be between $261 and $981 billion and costs between $68 and $103 billion.”

$261 to $981 billion: that’s a huge range that betrays the inherent subjectivity of the process. To estimate a regulation’s benefits, bureaucrats have to not only predict how effective the rule will be, but then also attach a dollar value to that effect. The “social cost of carbon”—the damage we do by emitting one ton of carbon dioxide, and thus the value of a rule preventing one ton of carbon pollution—is a case in point. Government agencies went with $21 [10] in 2010; that was soon dramatically hiked to $37 [11]. Some scientists would go as high as $220 [12]. That there is a social cost to carbon pollution, few would dispute, but it matters a lot who gets to decide what that cost is.

Therein lies the rub: our current system for making these decisions is dysfunctional. Part of the problem is that Congress has abrogated its lawmaking duty, deliberately empowering federal agencies to regulate as they see fit. And part of the problem is the Supreme Court, which has a policy [13] of deferring to agencies’ own interpretations of the laws that authorize their actions, so long as those interpretations are at least plausible.

As a result, between 2003 and 2015 [14], agencies created 21 rules for every law passed by Congress. And that’s not even counting the assorted “guidance” documents and memoranda [15] that emanate from the White House.

At the very least, our regulatory system violates the spirit of the separation of powers, granting legislative abilities to the executive branch. It may be outright unconstitutional [16]. But it’s hard to put the genie back in the bottle: the courts don’t seem inclined to do it, the efforts of one president can be undone by the next (and agencies finalized plenty of rules under our last conservative president [14] anyway), and Congress—which created this mess to begin with—can take its power back only by overriding a veto or persuading a president to limit her own power.

Nonetheless, ideas abound. Congress could insist that all major regulations be put up for a vote, and that they automatically sunset unless they are renewed. It could tell agencies that for every new rule they enact, they must repeal regulations of equal (or even greater) cost. It could give the executive branch a “regulatory budget,” capping the total cost of these policies. It could insist on more intensive review of the costs and benefits of regulations. It could at least stop delegating even more authority to the executive branch. (The Affordable Care Act famously used the phrase “the Secretary shall,” referring to the secretary of health and human services, more than 700 times [17].)

There are clearly economic gains to be had from rolling back the regulatory state. Perhaps more important, though, is to assess costs and benefits through a process that reflects the will of the people, not the will of the bureaucracy.

Robert VerBruggen is managing editor of The American ConservativeFollow @RAVerBruggen [18]

16 Comments (Open | Close)

16 Comments To "188.6 Million Hours of EPA Paperwork"

#1 Comment By MichaelT On July 5, 2016 @ 2:40 am

I really hope the AmCon readers take note of this article, since as of late they seem to think we are simply a few tariffs away from a broad revival of manufacturing in the US. But what good will tariffs do if the EPA won’t even approve the proposed new factories? Maybe it’s been the dramatic increase in environmental regulation since the Nixon administration that has made American manufacturing uncompetitive on the world stage, and not simply allowing individuals to the freedom to trade with people beyond borders?

#2 Comment By panda On July 5, 2016 @ 7:08 am

” It could tell agencies that for every new rule they enact, they must repeal regulations of equal (or even greater) cost.”

And people wonder why people don’t take libertarians seriously..

#3 Comment By Sally Snyder On July 5, 2016 @ 7:23 am

Here is an article that looks at how much it costs the economy for both individuals and corporations to remain compliant with the IRS:

[19]

Oddly enough, even though politicians often campaign on simplifying the tax code, reality shows that this is one promise that has never been kept.

#4 Comment By John On July 5, 2016 @ 7:57 am

A recent study from the Mercatus Center said the economy would have been 25 percent bigger in 2012—a difference of $13,000 per capita—if we’d held regulations at their 1980 level, thanks to the snowballing effects of economic growth.

Even assuming this is true, there is no reason to believe that these gains would have been distributed any more equitably than the gains associated with rising productivity since 1980. If I’m not going to be financially better off in the absence of regulation intended to keep my air, water, food and drugs as safe as possible, I might as well support the regulatory state in its current form.

Therein lies the rub: our current system for making these decisions is dysfunctional. Part of the problem is that Congress has abrogated its lawmaking duty, deliberately empowering federal agencies to regulate as they see fit. And part of the problem is the Supreme Court, which has a policy of deferring to agencies’ own interpretations of the laws that authorize their actions, so long as those interpretations are at least plausible.

Either you accept the necessity of rulemaking with notice and comment by the public in a modern state, or you don’t. Congress spends most of its time raising money and engaging in constituent services, with legislation occupying an ever-smaller portion of its time. Its investment in the regulatory agencies is intended to ensure that the policies it enacts do not suffer from Congress’ inherent lack of time and expertise to carry them out.

#5 Comment By An Agrarian On July 5, 2016 @ 9:21 am

Brings the Declaration’s accusation of King George III to mind:

“He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.”

#6 Comment By Robert VerBruggen On July 5, 2016 @ 10:16 am

panda:

That’s actually current law in Canada. [20]

#7 Comment By SteveM On July 5, 2016 @ 10:54 am

The fundamental problem is systemic and intractable. Which is that the American governance model is fatally flawed with a built in poison pill that prevents the required structural change. I.e., a redesign to parliamentary system.

Regarding the flaws, the first and most obvious is the evolution of the Imperial Presidency. A President can promise to veto any meaningful reforms and then blame Congress for “shutting down the government”. To say nothing of the military Global Cop shenanigans the President can engage in with impunity. The rancid and stupid MSM of course plays along.

The second flaw is the configuration of the Senate. In the 1790 census the free-person ratio of the largest state (Virginia) to the smallest (Delaware) was 9 to 1. That ratio is now 66 to 1 (California versus Wyoming). That asymmetry of influence prevents substantive change being adopted by the Senate. And the rules of the Senate make it a legislative swamp regardless of the method of allocation.

Moreover, the rules for amending the Constitution give each state an equal vote. And the small states would never give up their disproportional influence meaning the the very design of the Constitution precludes substantially modifying it, so the poison pill. I.e., a transition to a parliamentary model is politically impossible.

So it’s not just the EPA, the U.S. government is a terminal mess by its very nature. And it can’t be fixed. That’s why there are the nascent secession efforts from Texas and California.

Stick a fork in America – it’s cooked.

#8 Comment By bt On July 5, 2016 @ 11:04 am

As long as the Republican Party is only interested in simply burning everything down, there will be no credible counter-weight on the running of the government.

The current version of the GOP is not interested in passing legislation to make government better or more effective. Look at the current GOP congress – it has essentially settled into a belief that doing nothing is a wonderful thing. They say they have lots of great ideas, but it’s mostly lip service and posturing, and when given the chance they propose legislation to castrate and hobble government. You could say that the GOP has no honest interest in government at this point, beyond the military, the Fed and which rest rooms we can use.

Lots of people WANT the government to make sure that we have clean food, water and air and many don’t trust that businesses who are looking for a fast buck will do the right thing. They expect government to set some rules.

So if Conservatives want to change the rules that are written, they need to actually get interested in running things again. Not just suggesting we have no rules, not just contracting it all out to the private sector and not just passing tax cuts for the purpose of creating fiscal crises to assist in the process of drowning the whole thing in the bath tub.

#9 Comment By ged2phd On July 5, 2016 @ 11:24 am

Environmental regulations impose costs on businesses, which can raise prices, which can hurt economic growth, true. But they also save the economy billions by avoiding environmental degradation and pollution’s many noxious effects. These effects entail huge costs not only in health care, but in loss of human and material resources and potential. These “external” costs are borne not by individual polluters but by the society at large, so in effect they are a way of socializing the costs of doing business. A healthy environment, along with a healthy workforce and healthy customer base, is essential to a healthy economy. Sweeping opposition to all regulation is short-sighted and self-defeating. Conservatives used to recognize this. Remember, another word for environmental protection is conservation.

#10 Comment By bt On July 5, 2016 @ 11:55 am

“So it’s not just the EPA, the U.S. government is a terminal mess by its very nature.”

—-

I really agree with that.

The folks who want to venerate the Constitution as some holy text inspired by the almighty seem to not have ever looked too hard at some of the more illogical and counterproductive aspects of it. With it’s overlapping layers of government it’s a recipe for low accountability and a permanent employment acts for lawyers and politicians. 50 sets of state laws, 50 supreme courts, all with a layer of federal rule on top that no one can quite agree about.

Not to mention that much of what’s messed up about it was put in place to accommodate the, already at that point, problematic requirements of the Slave States. It’s not a great pedigree if you know the history.

It may have made sense 250 years ago. It is a mess at this point.

#11 Comment By FL Transplant On July 5, 2016 @ 12:55 pm

Perhaps conservative politicians could work to thin out the regulations, like they have with the tax code.

I suppose it’s easier and more politically productive to rail against a few hot button minor agencies unpopular with their constituents–Public Radio, the national Endowment of the Arts, and the like–than expend the effort needed for substantial change, though.

And by and large the regulatory thicket that constraints the salt of the earth small businesses we all depend on comes from state and local government, not the feds. So we’ve all seen the effort put into removing regulations and requirements at the state and local level when Republicans capture the legislative and executive branches of those governments.

#12 Comment By Grumpy Realist On July 5, 2016 @ 1:20 pm

I wonder how many of these regulation were urged into existence by companies that wanted to set regulatory barriers up against competition?

On the other hand, we don’t want to leave pollution control up to businesses–we know already that they can’t be trusted….

#13 Comment By An Agrarian On July 5, 2016 @ 2:58 pm

“A healthy environment, along with a healthy workforce and healthy customer base, is essential to a healthy economy. Sweeping opposition to all regulation is short-sighted and self-defeating.”

Taking the authoritarian paradigm to its logical conclusion, why stop at the environment? Since regulators want that proverbial “healthy economy” (which liberty-minded dunderheads subvert at every opportunity), let’s ban tobacco, alcohol, soda, and 75% of the pseudo-food in the grocery aisles. We can mandate gym memberships and thrice weekly 30-min workouts. These proposals will wipe out 90% of health care costs. Sweeping opposition to these ideas are short-sighted and self-defeating.

#14 Comment By bt On July 5, 2016 @ 4:22 pm

“Taking the authoritarian paradigm to its logical conclusion, why stop at the environment?”

Why do people do this? Take a reasonable middle of the road position, re-purpose it as an ideological, maximalist position and then go on to say how bad it is and let’s not do anything.

It is emblematic of the problem of trying to find reasonable policies that would balance the various interests involved in creating laws.

Labeling regulation as “Authoritarian” at the start is a giveaway that the argument is going to be ideological and not practical – this is the very problem that the GOP has when it comes to the nuts and bolts of running things. They start form what is essentially a rejection of government, and it’s not a useful framework for doing much of anything productive with the government.

In fact, it almost seems that the worse the Government functions, the better the GOP political plan works – so why bother doing anything. It then becomes a rationale for further wrecking it and burning it down.

#15 Comment By Commenter Man On July 5, 2016 @ 6:06 pm

How much lead in drinking water, or how many coal miner deaths or oil spills are we willing to tolerate?

The AAF/AAN are partisan organizations supporting Republicans and their reports should be read with that in mind:
[21]

#16 Comment By An Agrarian On July 5, 2016 @ 7:16 pm

“Why do people do this? Take a reasonable middle of the road position, re-purpose it as an ideological, maximalist position and then go on to say how bad it is and let’s not do anything. ”

People do this because some of us have been on the receiving end of ludicrous one-size-fits-all EPA, FDA, EPA, USDA (name your agency) inspections, handled by an incompetent checklist-bearing bureuacrat. Some of us have seen these agencies expand their authority over several decades; what may have started as “practical” quickly morphs into the impractical, at least for those of us who live and operate in the real world. Some of us already bought the “reasonable middle of the road” bill of goods, only to have the rules changed by the arbitrariness of a hell-bent inspector.

In other words, you’ll have to excuse some of us for cynicism and deep distrust of the EPA and their federal ilk. The “maximalist” position has for too long been on the side of the regulators … forgive those of us who labor to eek out a living – particularly sole proprietors – without being regulated out of existence.

Last, please spend some time studying who is underwriting the “reasonable” regulations. All too often its the corporatists working hand-in-glove w/ the regulators to squeeze out competition. Unless you want to leave the “nuts and bolts of running things” to the 1 percent, which is exactly where hyper-regulatory fever has led us.