An executive order issued by President Barack Obama that was touted to “cut red tape” has added $10.2 billion in regulatory costs to the economy, according to a new report.
Tuesday was the third anniversary of Executive Order 13563, “intended” to reduce “redundant, inconsistent and overlapping regulations,” prompting the American Action Forum to examine the effects of the order.
Obama and Cass Sunstein, former Office of Information and Regulatory Affairs pushed the executive order as “unprecedented” reform however, Sam Batkins, director of regulatory policy at American Action Forum, found that the action was hardly unique and had the opposite effect of its intended purpose.
On net, final rules from Order 13563 have added more than $10.2 billion in costs, mostly from new regulations labeled as ‘retrospective,’” Batkins said. “Final rules have cut 7.9 million hours of paperwork, but Dodd-Frank and the Affordable Care Act have easily outpaced those deregulatory gains.”
The “deregulatory measures” resulting from the executive order actually add over $10 billion in costs to the economy. For example, a final rule imposing energy standards for transformers carries a $5.22 billion cost to comply and 58,320 hours of paperwork.
The order has added 1.5 billion hours of paperwork to comply with its regulations. “As for the aggregate level of red tape, in fiscal year 2010, the federal government imposed 8.8 billion hours of paperwork,” the report said. “Today, that figure is 10.3 billion hours, a 17 percent increase, despite this ‘unprecedented reform.’” “It would take more than 750,000 employees working full-time to complete the new annual paperwork added since 2010.” .
Regulations under the Department of Health and Human Services (HHS) alone take 653 million hours of paperwork to comply, a 26 percent increase since the executive order was issued. A “Positive Train Control” rule that removed some regulatory provisions for rail safety did save $645.7 million but resulted in 3.9 million additional hours of paperwork.
The report also found that the administration is recycling regulations in order to achieve savings, citing at least 39 proposed or final rules that were initiated before the executive order, and 15 that were introduced under the George W. Bush administration.
According to Batkins: “The only aspect of recent regulatory reform that is unprecedented is that the administration has the temerity to recycle old regulations and claim them as part of a historic ‘retrospective review.’”
Businesses can’t afford much more of this type of help from the government.
