Biden’s regulatory report is in, but key costs remain in the shadows

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The election is over and among much else, federal regulations are emerging front and center for the incoming administration. While the federal debt sits at $35.9 trillion, the costs of regulatory impact remain largely unknown-despite annual requirements to quantify them individually and in the aggregate.

As it happens, the White House Office of Management and Budget (OMB) released the latest Draft Report to Congress on the Benefits and Costs of Federal Regulation and Agency Compliance with the Unfunded Mandates Reform Act the day after the election. Although over a year late, the report provides a glimpse of a piece of the elephant.

As I detail in a new Forbes column, the new report quantifies costs for a total of 29 major rules from fiscal year 2023. Nineteen of these rules report quantified benefits in excess of costs, which is normal for the federal government to claim. This subset of rules sport new quantified annual costs of $16.1 billion. Additionally, 10 rules lacking quantified benefits add another $1.92 billion in annual costs.

Note these are annualized costs from OMB, which are important yearly comparisons with the fiscal budget and other forms of scorekeeping. A broader analysis by American Action Forum looking at total rather than annualized agency estimates reckons that calendar-year 2023 (not the fiscal year, as in OMB's report, but there's overlap) regulations cost nearly $129 billion.

We do not yet have OMB's 2024 fiscal year report, but one would hope the Biden administration issues it soon. The aforementioned American Action Forum's shocking total cost estimate for calendar year 2024 rules is $1.3 trillion (driven primarily by the Environmental Protection Agency's Multi-Pollutant Emissions Standards, which alone account for $870 billion).

The implication is that when OMB's 2024 report does appear, we should see disclosed tens of billions in new annualized costs.

As often noted, these OMB reviews historically cover only a fraction of federal regulations, despite an aggregate total annual regulatory cost estimate being required by law. The total number of rules issued in calendar year 2023 exceeded 3,000, by way of comparison to OMB's reviewed major rule subset of 60.

OMB's reviews exclude independent agencies, such as the Federal Communications Commission, along with categories of intervention such as antitrust. Additionally, guidance documents, memoranda, and informal sub-regulatory policies go unquantified.

With an incoming Trump administration aiming to eliminate ten rules for every new significant regulatory action, regulatory bodies stand to face increased scrutiny. For now, OMB's reports are too tardy and too incomplete to capture the full scale of regulatory costs, rendering claims of net benefits for the overall regulatory enterprise suspect.

See also: "Biden White House Releases Newest Regulatory Cost-Benefit Report," Forbes