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  • Morning Bell: Tangled Up in Washington's Red Tape

    For months, Washington has focused on solving its uncontrolled addiction to spending. But while Congress and the White House use one hand to reach into your back pocket to take and spend your hard-earned dollars, they’re using another hand to wreak a different kind of nefarious harm—the proliferation of regulations, rules, and red tape, all of which impose heavy costs on America.

    In the just-released “Red Tape Rising: A 2011 Mid-Year Report,” The Heritage Foundation’s James Gattuso and Diane Katz explain the pervasiveness of government’s intrusive regulatory hand (that oftentimes goes go well beyond ensuring product safety) and how it controls nearly every facet of your daily life.

    Do you heat your home? Light your rooms? Buy and cook food? Watch TV? If the answer is “yes,” then you’ve fallen under federal regulation. And you’re paying for it, too. Gattuso and Katz explain how every product imaginable costs more because of regulations:

    The costs of regulation are inevitably passed on to consumers in the form of higher prices and limited product choices. Basic items, such as toilets, showerheads, light bulbs, mattresses, washing machines, dryers, cars, ovens, refrigerators, television sets, and bicycles all cost significantly more because of government decrees on energy use, product labeling, and performance standards that go well beyond safety—as well as hundreds of millions of hours of testing and paperwork to document compliance.

    The annual cost of regulation—$1.75 trillion by one frequently cited estimate—represents twice the amount of individual income taxes collected last year. Overall, from the beginning of the Obama Administration to mid-fiscal year (FY) 2011, regulators have imposed $38 billion in new costs on the American people, more than any comparable period on record. Consider Washington’s red tape to be a hidden tax.

    The mountain of regulations didn’t begin under the Obama Administration. Under the Administration of George W. Bush, for example, $60 billion in additional annual regulatory costs were imposed on Americans. But as Katz and Gattuso write, the rate at which burdens are growing has accelerated under the Obama Administration:

    During its first 26 months—from taking office to mid-FY 2011—the Obama Administration has imposed 75 new major regulations with reported costs to the private sector exceeding $40 billion. During the same period, six major rulemaking proceedings reduced regulatory burdens by an estimated $1.5 billion, still leaving a net increase of more than $38 billion.

    The actual cost of the new regulations is almost certainly higher due to under-estimation, agencies’ failures to analyze costs, and the fact that “non-major” rules aren’t even calculated. Amid the overwhelming weight of the evidence that government regulations are weighing down the American economy (consider how the economic recovery stalled after Obamacare was enacted), President Obama issued an executive order calling for an agency-by-agency review of existing regulations.

    But Gattuso and Katz say it’s too early for Americans to rest easy. The changes the Obama Administration has identified, if implemented, could reduce regulatory costs by about $1 billion per year—just a fraction of the new costs imposed every year.

    Meanwhile, American businesses and the American people continue to suffer under the regulatory burden, all while the government workforce keeps expanding and the number of regulations keep growing, with 2,785 rules in the pipeline.

    There are things Congress can do to protect Americans and the economy against the regulatory tide: require congressional approval of new major rules promulgated by agencies, create a Congressional Office of Regulatory Analysis to review proposed and existing rules independently, and establish a sunset date for federal regulations.

    Despite Obama’s pledge to eliminate burdensome regulation, his Administration has in the first half of FY 2011 created 15 new major regulations imposing $5.8 billion in additional annual costs and $6.5 billion in one-time implementation costs. All the while, the U.S. economy continues to drag forward with a 9.2 percent unemployment rate, adding only 18,000 new jobs in June. Perhaps Washington should stop growing the size of government and regulations and allow the U.S. economy to grow instead.

    Quick Hits:

    • House Speaker John Boehner’s (R-OH) is re-rewriting his debt ceiling plan following a report from the Congressional Budget Office projecting it would save less than the $1.2 trillion initially projected.
    • The United Kingdom has expelled diplomats from Libyan dictator Muammar Qadhafi’s regime and will recognize the Libyan rebel council as the “sole governmental authority,” joining the U.S. and France, which have made similar moves.
    • A suicide bomber killed the mayor of Afghanistan’s Kandahar city on Wednesday. The attack follows the assassination of Afghan President Hamid Karzai’s brother as well as other Karzai allies.
    • Seeing the nanny state writing on the wall, McDonald’s has bowed to pressure from health and children’s advocacy groups and will change the contents of its popular Happy Meals, reducing the number of French fries and increasing the amount of fruit.
    • A former special agent from the Bureau of Alcohol, Tobacco, and Firearms told a House committee yesterday that the agency had, in fact, allowed firearms bought in the United States to be transported to Mexico as part of the investigation of Mexican drug cartels.
    Posted in Economics [slideshow_deploy]

    28 Responses to Morning Bell: Tangled Up in Washington's Red Tape

    1. D. White says:

      The article only discusses the tip of the regulation ice berg. Read, "10,000 Commandments" to get a sense of the giant, hidden octopus that has been spawned by our bloated self serving government. We need a sun set amendment just as much as a balanced budget amendment to restore our freedoms.

    2. neidhartml says:

      But the scariest part of Obama and his administration is that he might be re-elected for another 4 years!!!!!!

    3. Rick says:

      How can we expect a bunch of corrupt politians to help us get out of this mess when they put us in it. First the only thing they know is how to steel and be greedy. To help would mean honesty something they are not familiar with be biggest crook the president is lost. He is more concerned with his acting carrer and giving the american ppl his BS. If you relate this to an average family who has credit card debt if you pay the minium amount you will never pay off your debt. Burt our leaders wouldn’t know that seeing as they get there kick backs and the nations debt is for the next set of crooks to worry about. The bottom line is default and let the rest feel the pain ass we rebuild under a new group of leaders who hopefully will keep the american dream alivce

    4. Laurie says:

      His plan is a complete government take-over…..slave state, we being the slaves and he being the One-World emporor. We must fight for our freedom and country by joining Heritage and the conservative groups to stop this nightmare.

    5. Don Vander Jagt, Grand Rapids, MI 49534 says:

      This debt limit debate is as phony as it gets!
      The cut cap and balance act sent to the Senate was already wimpy, however its there so now the Senate must take it up, amend it or whatever soots their fancy, and then work out a deal with the House before sending it to the WH.
      The RINO’s however are now busy negotiating with themseleves to find a compromise the enemy (the left) will embrace, how dumb is that?
      Until the right will admit and call the left on how what they are doing is destroying America, we will continue to get more regulated and farther in debt!
      We need Rep’s who will put country before the office they want to retain!

    6. Amy K says:

      If I was going to run for office…..and enough conservatives were elected..Here is my implified plan…No more dept of Education…why send money to DC so they can take a BIG chunk and dribble some back with restrictions. The dept of Energy- we are less independent and more broke since it's inception..States can handle their own energy issues..no more of that money to DC. The EPA…no, states can do their own monitoring. I would have zero income taxes…no need for the IRS..just a simple consumtion tax that everyone pays…everyone has skin in the game. National Welfare..No, States can decide what they want to do about this. And all DC spending has to be tied to GDP. That is the beginning….in a dream world I guess…

    7. Amy says:

      P.S> really like the Sunset thing!

    8. hotnike says:

      The president wants to regulate our lives and make us dependent on goverment money so his plan to socialize this country will be realized. WAKE UP PEOPLE.

    9. hotnike says:

      Just a comment I heard recently: A RECESSION IS WHEN YOUR NEIGHBOR IS OUT OF WORK

    10. ThomNJ says:

      I'd like to see a number of Congresscritters propose the review and ELIMINATION of rules promulgated by unelected bureaucrats. Too many of these folks seem to believe that they must "do something" when they get elected thinking that the only thing they can do is write more laws.

    11. Blair Franconia, NH says:

      Time to cut the red tape.

    12. Gene Zarwell says:

      RESOLVE! Deregulate private sector, de-fund congress, deny 3rd party interference, depart IRS – no taxes/no need/no Fed payroll/no worries.

    13. Kalifornian says:

      Socialism – A government structure where most or all means of production and resources are owned or completely controlled by the government.

    14. Victor Barney says:

      Thankyou, I've proved my point! BYE!

    15. doc-polymer says:

      Over regulation is what is killing job oportunity. Businesses are reluctant to take on new employees when they have no idea what the government will do in the future.

    16. Bob from Ohio says:

      You left out excess regulation from the Army Corps of Engineers, the Department of Energy , the EPA, and I'm certain many more federal, bureaucratic agencies that cost the consumer and are frequently hidded to athe consumer. We need a COMPLETE CLEAN OUT and start over again of too many complacent, non productive Government employees. American business and our Country as we know it will disappear unless big changes happen and soon.

    17. ed hopson says:

      The congress writes the law. Why not have the appropriate congressional committee review and vote acceptance of the regulation?

    18. Bruce from NH says:

      Ever wonder what those "czars" are doing with their time (and our tax dollars) ? I suspect that each and every one of these regulatory ideas come from one of their offices, homework meant to justify their existence
      We've lived in a country setting for 25 years, private home with our own well and septic But installing a new toilet meant having a govt-approved one which restricted (our) water usage and cost twice what others had been It also meant altering the septic line which now had to operate on a lower flush capacity
      Our state still has no seatbelt law, has higher voluntary compliance than neighboring states No helmet laws for cyclists, freedom of choice

    19. MadBohemy says:

      This is the "plan". Rules, regulations, not debated, voted on by representitves, law. Nameless, faceless, burueacrats that are to make it so complicated that compliance is impossible. Then comes the punitive phase. Exhorbinet fines, by the day, to ensure compliance, TO HELL WITH YOU AND YOU"RE FINES!!! No problem. We'll let the fines accumulate to the value of your net worth and then conficate it in lieu of the fine. Ferderally own property and cash to be used for revenue. Communist propagation. All legal in the eyes of the court and the world. Of course this new found revenuie will be distributed equally amongst the citizens of the world. How endearing. Lenin and Stalin couldn't have planned it any better. God help us.

    20. MNJ says:

      Just heard this tape of a coal mine owner on Glenn Beck this morning. The owner attended a meeting where all the lefties were trashing mining, etc. He finally had it – he's been beaten down. But this is what he said: (I paraphrase)just before he walked out the door:

    21. Larry Robinson says:

      The problem is that Democrats want the impossible: a perfectly safe world. Maybe we should lock them in a safe instead.

      The reason the economy is not recovering is that the cost of taxes and the cost of regulation now exceeds the entire amount of wealth the economy creates.

    22. Maren breit says:

      Can you tell me about the new bil hr 4646 and what that will do to us.

    23. Margaret Paddock says:

      I'm a little confused as to why everyone blames Congress when the Senate has to approve and pass any legislation and the President has to sign it. Seems to me the rat-hole is in the senate.

      Regulation in this country is what pays the big government salaries that's why they keep raising taxes to pay for the other stuff. They are thieves pure and simple and have the audacity to give themselves a raise.

      H.R. 4646 read about it here: http://www.snopes.com/politics/taxes/debtfree.asp It is another complicated, hairbrained idea from another democrat – a type of flat tax on top of the federal taxes.

    24. Pingback: tom

    25. shelly says:

      The regulations are in part due to the high number of law suits filed because of "faulty equipment." I understand that after a person has truly followed the directions on installing or using a product and their is an injury, the person has a right to sue the company. However, all the regulations in the world are not going to prevent human error in producing or using a product.

    26. DaninTexas says:

      I'm curious what was the cost of regulation under George W. Bush? If you're going to pin this on Obama, you should share how much he has actually increased regulation. I suspect most of this was there under Bush.

      • DaninTexas: As the article explains there were plenty of burdensome regulations under President Bush as well. However, it's the current rate of increase that should grab your attention. From the full paper (linked above):

        No other President has burdened businesses and individuals with a higher number and larger cost of regulations in a comparable time period. President Bush was in his third year before new costs hit $4 billion. President Obama achieved the same in 12 months.

    27. NONE says:


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