Flying Blind in a Red-Tape Blizzard

Attention, small-government conservatives: Ever helpful, this column has found yet another reason to be unhappy with President Bush. He appears to be the biggest regulator since the Nixon-Ford years.

Last month, George Mason University's Mercatus Center and the Weidenbaum Center on the Economy, Government, and Public Policy at Washington University in St. Louis released the latest of their annual reports on regulation in Washington. (The report, by Jerry Brito and Melinda Warren, is available at Mercatus.org.) Now, these numbers need to be handled with caution. They measure how much money the government's departments and agencies are spending to regulate, and how many people they are employing to do it.

They give, at best, a rough indication of how quickly the regulatory wheels are turning.

The left panel of the chart above tells the story. (The percentage calculations are mine, based on data supplied by the Weidenbaum Center.) From 2001 through 2006, Bush has increased inflation-adjusted regulatory spending by 6.5 percent a year, and increased regulatory staffing by 6.3 percent. You have to go back before President Carter (a deregulator) to find a president who has done as much regulatory spending and hiring as Bush. (Adding the projected figures for 2007 does not substantially change the picture.)

A cruder, but still suggestive, measure of regulatory activity is the annual page count in the Federal Register, where the government publishes proposed and final regulations. Burdensome regulations may be concise, of course, and deregulation can run to hundreds of pages. Still, if the page count moves in the same direction as regulatory spending and staffing, that deepens suspicion that something is really happening. Sure enough, as the right panel of the chart shows, Bush outstrips Carter, the previous record-holder for average annual Register pages.

A new report by Wayne Crews of the Competitive Enterprise Institute, a free-market think tank, estimates that federal regulation now costs the economy more than $1.1 trillion a year. Crews also takes note of one data series that points in a contrary direction: The raw number of final rules published in the Federal Register is down since the 1990s; indeed, it has been declining since the 1970s. "But that doesn't tell you about the costs of those rules," he cautions.

Nor does it tell you about the benefits. Asked about the rising indicators of red tape, the Office of Management and Budget points to its recent draft report to Congress on the costs and benefits of federal regulation. The OMB report finds that the average annual cost of major regulations issued during the Bush years was almost 50 percent lower than in the 1980s and 1990s, and that the average benefits were more than twice as large as in the Clinton years.

Note the word "major": To earn that sobriquet, a regulation must cause an estimated economic impact of $100 million or more. Fewer than 1 percent of regulations qualify, so OMB's figures give an incomplete picture. Moreover, some regulatory economists take the administration's cost-benefit analyses with a grain of salt. "Over the years, I have found that many analyses done by government regulatory agencies have major flaws," says Robert Hahn, the executive director of the AEI-Brookings Joint Center for Regulatory Studies. Agencies, after all, are inclined to produce cost-benefit analyses that justify what they do.

That said, OMB may have a point.