Study: Government Regulations Decrease Under Bush Administration

By Jim Burns | July 7, 2008 | 8:20 PM EDT

( - A public policy research group says the federal government issued fewer regulations during the first year of the Bush administration, compared with the last year of the Clinton administration.

But even so, the study found that hidden regulatory costs still outpace any future federal budget surpluses.

The study by the Cato Institute found that while the tax burden is easy to track, regulatory costs are easily hidden. Federal environmental, safety and health, and economic regulations cost hundreds of billions of dollars a year, the study concluded.

The Cato study was done by Clyde Wayne Crews, the director of Cato's technology policy studies.

Crews said federal agencies issued 4,132 final rules in 2001, down from the 4,313 final rules issued during the last year of the Clinton administration in 2000.

"In 1998, the median two-earner family's after-tax income of $41,846 contained $7,410 in hidden regulatory costs," Crews said. "Thus, regulatory costs eat up about 18 percent of the after-tax family budget."

The 2001 Federal Register was 13 percent smaller than it was in 2000 but it still contained 64,431 pages, the study noted.

Of the 4,509 regulations now in the process of being finalized, 149 are "economically significant" rules that will have at least $100 million in economic impact. "That means new regulations imposing at least $14.9 billion yearly in future off-budget costs are in the pipeline," according to Crews.

Regulatory costs may end up canceling future federal budget surpluses, Crews believes.

He said Congress should be held directly accountable for the compliance costs that federal regulations place on the public.

Crews suggested the best way to ensure congressional accountability is to require Congress to vote on proposed regulations before they become binding. "This step would uphold citizens rights to no regulation without representation."

But on the other side of the argument, economist Robert Kuttner said federal government deregulation has cut jobs and has become a back-door form of class warfare.

"The rich don't need government because they can simply opt out -- to private schools, exclusive clubs, gated communities, personal physicians, nannies, limousines, and helicopters," said Kuttner in an article in the "American Prospect" magazine. "The rest of us depend on basic public services and social infrastructure," he wrote.

"Starve Medicare, and you ration health care for those with a limited ability to pay. Cut federal help to schools, and you deny upward mobility to the children of the nonrich," said Kuttner. "Refuse to address the job-family straddle faced by working parents, and you assault every child whose parents cannot afford expensive private day care. That's class warfare, big-time."

Kuttner said government deregulation has been devastating for America's blue-collar workers.

"The old, regulated phone company had a social compact with its workers," he argued. "Regulation guaranteed stable (but not excessive) profits. This climate, in turn, allowed gains of productivity to be shared with workers. The old AT&T accepted its unions, and its employees delivered a high quality of service to consumers," said Kuttner.

"What is true of telecommunications is also true of the airlines, hospitals and nursing homes, trucking companies, and public utilities. Deregulation guts good jobs. The blue-collar middle class, once the pride of America, is becoming an endangered species," Kuttner concluded.

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