Unparalleled increase in regulatory burdens spells a decline in economic freedom and individual liberty, with a concomitant increase in political gamesmanship and cronyism
One of the more disturbing trends in government expansion over the last 30 years has been the collection of laws, regulations and binding court decisions that make up the 'nanny state.' These laws and regulations represent government at its most arrogant.
The tide of red tape that threatens to drown US consumers and businesses surged yet again in 2015. More than $22 billion per year in new regulatory costs were imposed on Americans last year, pushing the total burden for the Obama presidency to exceed $100 billion annually. (1)
Federal agencies wrote a record breaking 81,611 pages of regulations last year to advance President Obama's massive regulatory agenda which includes tackling issues from global warming to health care. (2)
The worst of last year's wave--in terms of cost, at least--was the EPA's Clean Power Plan. The rule represents the first direct regulation of so-called greenhouse gas emissions from power plants at a cost of $7.2 billion a year (and far more according to critics). Despite the huge costs, the plan will do nothing to mitigate global warming. (1)
The EPA's Clean Power Plan overstates its benefits and underestimates its costs. The EPA claims the plan will provide annual benefits worth $20 billion and that other various 'co-benefits' could be worth and additional $14 to $34 billion. The agency claims the costs will be a mere $9 billion each year. A study for an industry group estimated the Clean Power Plan will cost a much more staggering $41 billion annually. (3)
The environmental justifications for the Clean Power Plan are also weak. Analysis by the Cato Institute using models created by the EPA states the plan will only divert 0.019 degrees C of warming by the year 2100, an amount so small it can't be detected.
The Clean Power Plan will eliminate most cheap coal power plants and replace them with much more expensive and unreliable sources like solar and wind. The EPA's analysis assumes wind and solar power will solve all technical issues by that time period. The agency even assumes solar panels will generate electricity at midnight. The plan has already been legally challenged by 27 state governments and temporarily blocked by the US Supreme Court. (3)
A study by the Manhattan Institute estimates that the plan would increase the costs of living for the poorest American families an additional $19 billion per year, equivalent to increasing their taxes by 166 percent. The tax increase would also raise taxes on other poor families by an extra $25 billion, equal to a 33 percent tax increase. Living costs for the richest households would only increase by 4 percent. (4)
Taxing carbon dioxide emissions or gasoline inherently hurts the poor more than the rich because the lowest income US households spend roughly 35 percent of their annual income on energy, while the highest income US households spend less than 3 percent of their income on energy. The average American's electric bill has gone up 10 percent since Obama took office in January 2009 due to federal regulations.
America's problem with excessive regulation did not start with the Obama administration. His predecessor George W. Bush was hardly a paragon of deregulation. Although Bush showed restraint during his first term, the number of regulations soared during his final years in office. Under the two administrations combined, their new rules added $176 billion in annual regulatory costs on Americans. (1)
And there is much more to come. Obama's final year in the White House could be his busiest. Historically, rulemaking increases as presidents scramble to fulfill their regulatory agenda before leaving office. There are already more than 2,000 proposed or final rules in the pipeline--including 144 that are expected to cost $100 million, or more a year. These include yet more energy-efficiency mandates for home and commercial appliances, additional food-labeling requirements, stricter fuel economy standards for vehicles, and more stringent limits on consumer access to credit. (1)
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Summary
The unparalleled increase in regulatory burdens spells a decline in economic freedom and individual liberty, with a concomitant increase in political gamesmanship and cronyism--all of which inhibit innovation, investment and job creation, increases prices, and curtails consumer choice.
References
James Gattuso and Diane Katz, "20,642 new regulations added in the Obama presidency," dailysignal.com, May 23, 2016
Michael Bastasch, "2015 was a record year for federal regulators," The Daily Caller, December 30, 2015
Andrew Follett, "Study: EPA overstated benefits and ignored costs of Clean Power Plan," cfact.org, June 16, 2016
Andrew Follett, "Obama's global warming plan costs poor Americans $44 billion, raises taxes by 166%," cfact.org, April 25, 2106
Jack Dini is author of Challenging Environmental Mythology. He has also written for American Council on Science and Health, Environment & Climate News, and Hawaii Reporter.
