News that doesn't receive the necessary attention.

Friday, October 7, 2016

$19.5 billion was taken out of the US economy in 2012 via government regulations. More was taken out of the US economy in 2012 by the Obama admin. than in the entire first terms of Bush and Clinton combined-US gov. statistics, George Washington University

Chart: "Source: OMB 2013 Draft Report to Congress on the Benefits and Costs of Federal Regulations, Appendix tables D-1-D-3. OMB reports data by fiscal years except the first year of each president’s term, which begins on January 20th of that year." (Tables, "Rules issued from October 1, 2002 to September 30, 2012" at end of this post)

"The vast majority of "laws" governing the United States are not passed by Congress but are issued as regulations, crafted largely by thousands of unnamed, unreachable bureaucrats." 5/24/2013
4/22/2013, "Costs of new regulations issued in 2012 dwarf those of previous years, according to OMB report," Regulatory Studies Center, George Washington University, Susan E. Dudley

"The Office of Management and Budget quietly released its draft 2013 Report to Congress on the Benefits and Costs of Regulations on Friday, April 19, (2013) covering regulatory activity through the end (September 30) of fiscal year 2012. 

By the administration’s own estimates, the rules it issued in FY2012 alone imposed more costs on the economy than all the rules issued during the entire first terms of Presidents Bush and Clinton, combined. 

The report does not highlight this fact, but instead points to the enormous regulatory benefits that it claims will flow from these rules.

The benefits are very different in character from the costs, however. Of the reported benefits of regulations issued in FY 2012, over 95% derive from two assumptions that many scholars find questionable: 1) that reductions in emissions of fine particles will cause large reductions in premature mortality (55% of total benefits); and 2) that depriving consumers of their preferred choices in purchasing appliances and cars will ultimately make them better off, because the fuel savings are worth more–to the consumers themselvesthan consumers realize (contributing 41% of the total benefits). 

In making comparisons of net benefits across different administrations, the OMB report uses another questionable technique. If a court has vacated a rule issued by a previous administration, the report removes the net benefits from that administration’s tally. Yet it continues to include in the Obama administration’s tally the cross-state air pollution rule (CSAPR) vacated in August 2012. With claimed net benefits of almost $40 billion per year, selectively taking credit for the vacated CSAPR clearly affects the net benefits comparison. This seems particularly inappropriate because, as a result of the vacatur, the EPA is actually enforcing the Bush administration’s (also overturned, but not vacated) clean air interstate rule (CAIR)."


Added: One 2011 EPA regulation takes $8.1 billion out of the economy every year, per US gov. report:

"2013 draft report to congress on the benefits and costs of federal regulations and agency compliance with the unfunded mandates reform act," 

p. 14, "2. "EPA Air Rules"

"The National Emission Standards for Hazardous Air Pollutants From Coal- and Oil-Fired Electric Utility Steam Generating Units (“Utility MACT”), issued in estimated to be the costliest of the EPA rules, has annualized costs of about $8.1 billion....(p. 15)...With respect to many of these rules, there remains room for continuing research and analysis to resolve uncertainties in benefits estimates."... 


More on Rules and Regulations issued by the Executive Branch:

page 21, "Major Rules [Regulations] Issued by Executive Departments and Agency,"

("Note that 22 of the 47 (major) rules are transfer rules.") 

"Transfer rules" usually transfer income from taxpayers to program beneficiaries:

page 22, "Twenty-two of the rules were “transfer rules”—rules that primarily caused income transfers, usually from taxpayers to program beneficiaries....

We recognize that...the transfers are not lump-sum. Hence, transfer rules may create social benefits or costs; for example, they may impose real costs on society to the extent that they cause people to change behavior, either by directly prohibiting or mandating certain activities, or, more often, by altering prices and costs. The costs resulting from these behavior changes are referred to as the “dead weight losses” associated with the transfer.

The Regulatory Right-to-Know Act requires OMB to report the social costs and benefits of these rules, and OMB encourages agencies to report these costs and benefits for transfer rules;"... 

All agencies are all free to "transfer" income:

page 23, "Overall (in 2012), HHS promulgated the largest number of rules (twenty-one). Fourteen of these largely transfer income from one group of entities to another without imposing significant costs on the private sector, while the other seven do have significant economic impact on the private sector."... 

p. 26, "Transfers" (Oct. 1, 2011-Sept. 30, 2012, in 2001 dollars, in billions) 

p. 27, Among largest "transfers," table 1-6a 

$23.8 billion, "Medicaid Eligibility Expansion Under the Affordable Care Act of 2010 (CMS-2349-F)"...


May 2013 Washington Post article: Most "laws" today are "regulations" which have nothing to do with Congress:

""The vast majority of "laws" governing the United States are not passed by Congress but are issued as regulations, crafted largely by thousands of unnamed, unreachable bureaucrats....The shift of authority has been staggering. The fourth branch now has a larger practical impact on the lives of citizens than all the other branches combined."

5/24/2013, "The rise of the fourth branch of government," Washington Post, Jonathan Turley, opinion
"The growing dominance of the federal government over the states has obscured more fundamental changes within the federal government itself: It is not just bigger, it is dangerously off kilter. Our carefully constructed system of checks and balances is being negated by the rise of a fourth branch, an administrative state of sprawling departments and agencies that govern with increasing autonomy and decreasing transparency.

This exponential growth has led to increasing power and independence for agencies. The shift of authority has been staggering. The fourth branch now has a larger practical impact on the lives of citizens than all the other branches combined

For much of our nation’s history, the federal government was quite small. In 1790, it had just 1,000 nonmilitary workers. In 1962, there were 2,515,000 federal employees. Today, we have 2,840,000 federal workers in 15 departments, 69 agencies and 383 nonmilitary sub-agencies.

The rise of the fourth branch has been at the expense of Congress’s lawmaking authority. In fact, the vast majority of “laws” governing the United States are not passed by Congress but are issued as regulations, crafted largely by thousands of unnamed, unreachable bureaucrats. One study found that in 2007, Congress enacted 138 public laws, while federal agencies finalized 2,926 rules, including 61 major regulations.

This rulemaking comes with little accountability. It’s often impossible to know, absent a major scandal, whom to blame for rules that are abusive or nonsensical. Of course, agencies owe their creation and underlying legal authority to Congress, and Congress holds the purse strings. But Capitol Hill’s relatively small staff is incapable of exerting oversight on more than a small percentage of agency actions. And the threat of cutting funds is a blunt instrument to control a massive administrative state — like running a locomotive with an on/off switch.

The autonomy was magnified when the Supreme Court ruled in 1984 that agencies are entitled to heavy deference in their interpretations of laws. The court went even further this past week, ruling that agencies should get the same heavy deference in determining their own jurisdictions — a power that was previously believed to rest with Congress. In his dissent in Arlington v. FCC, Chief Justice John Roberts warned: “It would be a bit much to describe the result as ‘the very definition of tyranny,’ but the danger posed by the growing power of the administrative state cannot be dismissed.”

The judiciary, too, has seen its authority diminished by the rise of the fourth branch. Under Article III of the Constitution, citizens facing charges and fines are entitled to due process in our court system. As the number of federal regulations increased, however, Congress decided to relieve the judiciary of most regulatory cases and create administrative courts tied to individual agencies. The result is that a citizen is 10 times more likely to be tried by an agency than by an actual court. In a given year, federal judges conduct roughly 95,000 adjudicatory proceedings, including trials, while federal agencies complete more than 939,000.

These agency proceedings are often mockeries of due process, with one-sided presumptions and procedural rules favoring the agency. And agencies increasingly seem to chafe at being denied their judicial authority. Just ask John E. Brennan. Brennan, a 50-year-old technology consultant, was charged with disorderly conduct and indecent exposure when he stripped at Portland International Airport last year in protest of invasive security measures by the Transportation Security Administration. He was cleared by a federal judge, who ruled that his stripping was a form of free speech. The TSA was undeterred. After the ruling, it pulled Brennan into its own agency courts under administrative charges.

The rise of the fourth branch has occurred alongside an unprecedented increase in presidential powers — from the power to determine when to go to war to the power to decide when it’s reasonable to vaporize a U.S. citizen in a drone strike. In this new order, information is jealously guarded and transparency has declined sharply. That trend, in turn, has given the fourth branch even greater insularity and independence. When Congress tries to respond to cases of agency abuse, it often finds officials walled off by claims of expanding executive privilege.

Of course, federal agencies officially report to the White House under the umbrella of the executive branch. But in practice, the agencies have evolved into largely independent entities over which the president has very limited control. Only 1 percent of federal positions are filled by political appointees, as opposed to career officials, and on average appointees serve only two years. At an individual level, career officials are insulated from political pressure by civil service rules. There are also entire agencies — including the Securities and Exchange Commission, the Federal Trade Commission and the Federal Communications Commission — that are protected from White House interference.

Some agencies have gone so far as to refuse to comply with presidential orders. For example, in 1992 President George H.W. Bush ordered the U.S. Postal Service to withdraw a lawsuit against the Postal Rate Commission, and he threatened to sack members of the Postal Service’s Board of Governors who denied him. The courts ruled in favor of the independence of the agency.... 

The shift of authority has been staggering. The fourth branch now has a larger practical impact on the lives of citizens than all the other branches combined. The marginalization Congress feels is magnified for citizens, who are routinely pulled into the vortex of an administrative state that allows little challenge or appeal. The IRS scandal is the rare case in which internal agency priorities are forced into the public eye. Most of the time, such internal policies are hidden from public view and congressional oversight. While public participation in the promulgation of new regulations is allowed, and often required, the process is generally perfunctory and dismissive.
In the new regulatory age, presidents and Congress can still change the government’s priorities, but the agencies effectively run the show based on their interpretations and discretion. The rise of this fourth branch represents perhaps the single greatest change in our system of government since the founding.
We cannot long protect liberty if our leaders continue to act like mere bystanders to the work of government."

"Jonathan Turley is the Shapiro professor of public interest law at George Washington University." 


Tables, "Rules issued from October 1, 2002 to September 30, 2012"

2012: $19.5 billion taken out of US economy via regulations, Obama admin. estimate

pages 18-19, "Table 1-3: Total Annual Benefits and Costs of Major Rules by Fiscal Year, (billions of 2001 dollars)"

"Table 1-3 reports the total benefits and costs of rules issued from October 1, 2002 to September 30, 2012 by fiscal year for which reasonably complete monetized estimates of both benefits and costs are available." 20




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