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May 2, 2025 13:23-13:31 - CSPAN
07:44
Washington Journal Clyde Wayne Crews
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greta brawner
cspan 01:07
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Speaker Time Text
unidentified
And policies enacted towards them.
From the University of Chicago Institute of Politics, watch live at 1.30 p.m. Eastern on C-SPAN.
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greta brawner ▲ ● ▼
And we're back with Wayne Cruz.
He's with a Competitive Enterprise Institute Fellow for Regulatory Studies here to talk about the cost and scope of federal regulations.
Let's begin with that number because the Washington Times did a story about your report.
Federal Red Inc now costs businesses more than $2.1 trillion per year according to your report.
When we dig a little bit deeper into that number, the total cost, $2.2 trillion annually, cost to the U.S. households average is $16,000 annually and consumes 16% of income, 21% of household expenses.
How'd you come up with these numbers?
unidentified
Basically, everybody knows, I think, this year that the federal government is set to spend $7 trillion and on that a $2 trillion deficit.
But spending is just one of the ways that the federal government gets, involves itself in the economy.
The hidden cost of regulation is another one.
And, you know, regulation of the economy, economics, antitrust, environment, health and safety, and all the paperwork costs that go with that and so forth.
Years back, the Small Business Administration used to compile studies of the aggregate cost of regulations.
And back at that time, the costs were approaching a trillion dollars.
Since then, there's been a lot of regulation.
Every year, the Office of Management and Budget, it's often late, but every year the Office of Management and Budget compiles a cost-benefit report for regulations.
It's not all-inclusive.
It gets at a fraction of them.
But using various estimates from the federal government, private estimates, the National Association of Manufacturers, for example, has an estimate of the cost of regulation of $3 trillion.
I use largely government studies that I can find and try to tabulate those in charts.
And I use a placeholder.
This year, $2.155 trillion.
That's equivalent to what the deficit is going to be this year.
It's roughly equivalent to what individual income taxes are, same number, $2 trillion, four times the amount of federal income tax collections.
And if you think of corporate profits of around $3.5 trillion, regulations are close to 60% of that.
So it's a massive part of the economy.
And we may get frustrated by the debt, which is now approaching $40 trillion.
We may get frustrated by the government spending.
But regulation is a huge factor in the economy, especially when you think sometimes government is steering and the market is just rowing in high-tech, in antitrust, in AI.
Yet we don't measure that.
You can't look up the cost of regulations the way you can with debt and the federal spending.
That's what I'm trying to get at with the 10,000 Commandments Report.
And I always say I would love for Congress to take on this job and for OMB and the federal government to do these regulatory cost estimates so I can quit writing 10,000 commandments.
greta brawner ▲ ● ▼
Wayne Cruz is the author of the 10,000 Commandments, an annual snapshot of the federal regulatory state.
Why do you call it the 10,000 Commandments?
unidentified
Well, I was just talking to a colleague earlier this morning.
It's been 32 years since I started this report.
We're still trying to get this done.
And it turns out, actually, in the new reconciliation markup and judiciary, there's a call for an aggregate cost estimate.
I think that's terrific, and I would love to see that survive.
But when I first put this report together, I was a student at George Mason.
I came working on the Hill.
I worked in the Senate, worked at FDA a little bit too.
But I put together a report because I was interested in this question of federal involvement in the economy.
I knew what spending was.
We were looking at the cost of legislation and so forth.
And I put together a report.
It had a boring title, like Regulatory Trends 1986 to 1992.
And I thought it's got to have something cute.
And there was this book about antitrust and how subjectively that law gets applied.
And it was called 10,000 Commandments about this arbitrariness of how certain regulatory incursions can take place.
And I thought that would make a terrific title.
And I did it, and it just kind of stuck.
greta brawner ▲ ● ▼
So when you talk about the cost of these regulations, do you calculate it by looking at what is passed down to the consumer?
unidentified
It's a mix because a lot of what when OMB or the agencies assess costs of say an environmental regulation or a labor regulation, they look at compliance costs on business.
You know, energy rules and so forth would be that way.
But there's also the productivity losses, the potential job impacts.
And I'll tell you, as an official position, I'm not an economic planner.
I don't actually think an external observer can calculate the cost of what someone is subjectively experiencing.
But I do think, since regulations are laws, that Congress, if it isn't requiring that cost estimate for rules, that Congress needs to take accountability for rules.
So this is really about accountability too.
So in when we fight over this, you know, there's, oh, you know, the regulations have benefits, don't worry about the costs and things like that.
The question should never be, should we do a cost analysis?
I think the debate has always been, do you do it bottom up and top down?
I think, okay, yeah, you're both right.
Let's kind of do both and pull it together.
The NAM estimate, for example, is regression analysis and then compliance costs that businesses face and so forth.
I try to use as much of the government figures as I can.
But also noting that a lot of regulatory costs are completely left out.
For example, independent agencies, FCC, FTC, left out.
Financial agencies in particular too have been heavily involved in regulation during the Biden administration and switching under Trump.
But a lot of the regulatory state, you know, big chunks of it weren't getting measured at all.
And where I can't do that, what I do like to do in 10,000 Commandments and other write-ups is to point out where the gaps are and say that they need filling.
greta brawner ▲ ● ▼
You said a potential impact on jobs.
Explain how.
unidentified
Well, because with regulations, if there's a lot of red tape, you know, small businesses are less likely to engage.
I mean, there was just a letter.
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