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Federal Regulatory Agencies Are Bigger and
More Costly Than Ever |
From:
Center for the
Study of American Business (CSAB)
The administrative costs of federal regulation are budgeted to
reach an all-time high of $19.8 billion in 2001, according to
the Center for the Study of American Business at Washington
University in St. Louis. This follows an estimated 8.2 percent
increase in 2000. Staffing at the federal regulatory agencies is
forecasted to grow to almost 132,000 in 2001 - also a new high
and a 2 percent jump from this year.
In Federal Regulatory Spending Reaches a New Height: An Analysis
of the Budget of the United States Government for the Year 2001,
CSAB's Melinda Warren analyzes projected spending and staffing
for the 54 regulatory agencies as proposed in President
Clinton's eighth budget. The $19.8 billion price tag to
administer federal regulations in 2001 is a 4.8 percent increase
over 2000. In current dollars, this is the highest level of
spending ever projected. After adjusting for inflation, the data
translate to a 2.7 percent increase.
If these forecasts hold out, regulatory spending during the
Clinton presidency will grow by more than 22 percent, while the
number of people needed to run the federal regulatory apparatus
would increase by 5 percent. In 2001, only four agencies are
scheduled to decrease spending on regulatory activity; 41
agencies will have increased budgets; nine agencies' budgets
will remain the same. In addition, the president's budget is
forecasting the largest number of federal regulatory employees
in our nation's history - 131,983.
The CSAB report divides the regulatory agencies between "social"
and "economic" regulation. Regulatory programs designed to deal
with health, safety and environmental issues are designated as
social regulation. This category includes agencies such as the
Environmental Protection Agency, the Drug Enforcement
Administration and the National Labor Relations Board. The more
traditional, industry-specific form of regulation is referred to
as economic regulation. Agencies in this category include the
Federal Communications Commission, Federal Deposit Insurance
Corporation and Federal Trade Commission.
Spending on Federal Regulatory
Activity
(Fiscal Years, Billions of 1996 Dollars)
Nearly 79 percent of administrative costs of federal regulation
are for social programs. Agencies in this category that are
slotted for the biggest spending increases in 2001 include the
Food and Drug Administration, Occupational Safety and Health
Administration and the Equal Employment Opportunity Commission.
Agencies administering economic regulations will enjoy some big
increases, too. Those expecting more than a 10 percent gain are
the Commodity Futures Trading Commission, Federal Communications
Commission and the Department of Justice's Antitrust Division.
Agencies that primarily perform taxation, entitlement,
procurement, subsidy and credit functions are excluded from the
CSAB report. This includes agencies such as the Internal Revenue
Service, the Social Security Administration, and the Department
of Defense.
CSAB has tracked the size and cost of the federal regulatory
agencies for over 20 years. Warren's analysis of the Clinton
Administration's budget for 2001 shows that federal regulation
in America - after a slight decline in the mid-1990s - has
resumed a substantial upward growth trend.
The Center for the Study of
American Business is a nonpartisan, nonprofit research
organization at Washington University in St. Louis that conducts
scholarly research on issues affecting the American business
system. Please contact the Center at (314) 935-5676 if you would
like a copy of Federal Regulatory Spending Reaches A New Height:
An Analysis of the Budget of the United States Government for
the Year 2001 or visit the CSAB web site at
http://csab.wustl.edu.
Melinda Warren is associate director at the Center.
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