By John Merline Investors Business Daily
If the federal governments regulatory operation were a business it would be one of the 50 biggest in the country in terms of revenues and the third largest in terms of employees with more people working for it than McDonalds Ford Disney and Boeing combined.
Under President Obama while the economy is struggling to grow and create jobs the federal regulatory business is booming.
Regulatory agencies have seen their combined budgets grow a healthy 16 since 2008 topping $54 billion according to the annual Regulators Budget compiled by George Washington University and Washington University in St. Louis.
Thats at a time when the overall economy grew a paltry 5.
Meanwhile employment at these agencies has climbed 13 since Obama took office to more than 281000 while private-sector jobs shrank by 5.6.
Michael Mandel chief economic strategist at the Progressive Policy Institute found that between March 2010 and March 2011 federal regulatory jobs climbed faster than either private jobs or overall government jobs. (See chart.)
Regulatory production is way up too if you measure that by the number of rules federal agencies churn out.
The Obama administration imposed 75 new major rules in its first 26 months costing the private sector more than $40 billion according to a Heritage Foundation study. No other president has imposed as high a number or cost in a comparable time period noted the studys author James Gattuso.
The number of pages in the Federal Register where all new rules must be published and which serves as proxy of regulatory activity jumped 18 in 2010.
This July regulators imposed a total of 379 new rules that will cost more than $9.5 billion according to an analysis by Sen. John Barrasso R-Wyo.
And much more is on the way. The Federal Register notes that more than 4200 regulations are in the pipeline. That doesnt count impending clean air rules from the EPA new derivative rules or the FCCs net neutrality rule. Nor does that include recently announced fuel economy mandates or eventual ObamaCare and Dodd-Frank regulations.
But whats good for regulators isnt necessarily good for the private sector as compliance burdens impose ever-increasing costs on businesses.
Our economy is continuing to sink Sen. Barrasso said and its being weighed down by regulations coming out of this administration.
By 2008 the cost of complying with federal rules and regulations already exceeded $1.75 trillion a year according to a 2010 study issued by the Small Business Administration.
Worse the SBA found that small companies which account for most of Americas new jobs spend 36 more per employee to comply with these rules than larger firms.
Cass Sunstein who runs the White House Office of Information and Regulatory Affairs denies the regulatory upsurge writing recently that there has been no increase in rule making in this administration. He also notes Obama ordered a comprehensive regulatory review in January that uncovered $1 billion worth of needless red tape.
But Progressive Policy Institutes Mandel says this review doesnt go far enough and that having regulators prune their own rules has been tried repeatedly in the past and its always fallen far short of expectations. He favors an independent regulatory improvement commission.
Meanwhile Rep. Geoff Davis R-Ky. is pushing the REINS Act which would require Congress to vote for and the president to sign off on all new major regulations.
Not everyone in the Obama administration sees a problem. The EPA thinks new regulations can fuel the economy and hiring.
The EPA wrote in February that in periods of high unemployment an increase in labor demand due to regulation may have a stimulative effect that results in a net increase in overall employment.
