FEULNER: Red tape on the rise

By Ed Feulner– President of the Heritage Foundation

The Washington Times   Tuesday, November 2, 2010

Taxes remind us of the unwelcome gap between “net” and “gross” pay. It’s a gap that pinches even when taxes are as low as they should be to encourage economic growth – which is rare.

But one thing can be said for the taxes listed above: At least they’re out in the open. They’re labeled as taxes, and when you pay them, you know what that portion of your paycheck is going toward. Whether you’re getting your money’s worth is another matter.

Contrast that with what many experts call “the hidden tax” – regulations. The cost is steep. And yes, you pay it. We all do.

How much? Reports from government regulators show that Washington imposed 43 major new regulations in fiscal 2010 – an unprecedented number – at an annual cost of $26.5 billion. This is far higher than the cost in any other year for which records are available, according to a new report from the Heritage Foundation. That’s $450 for a typical American family every year.

Think this will affect only big corporations? Guess again.

Take the new efficiency standards for residential water heaters and other heating equipment. They impose an annual cost of $1.3 billion. Making the necessary appliance upgrades so that the heaters comply with the new standards will raise the price of a typical gas water heater by $120 on top of the hundreds of dollars you already pay.

Or look at the fuel-economy and emission standards coming your way courtesy of the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA). Yearly cost: $10.8 billion. According to the NHTSA, automakers will attempt to recoup these costs by raising the average price of a new vehicle by $457 in 2012. That added price will be $985 in 2016. Want to see the price tag of your next car or truck $500 to $1,000 higher?

Then there are the limits on “effluent” discharges that the EPA is imposing on construction sites. The annual price tag for this looks a bit more manageable at first: $810.8 million. But, the EPA itself notes, the new limits will force 147 construction firms to close and will cost 7,257 jobs. They’ll hit homebuyers in the wallet as well, raising typical mortgage costs by about $1,953.

Although the number and the total cost of this year’s regulations are both all-time records, they’re nothing new. This expensive burden has been increasing for some time. Ever heard someone spout the conventional “wisdom” that President George W. Bush’s tenure was a period of deregulation? Government data flatly contradict this claim. The regulatory burden increased by more than $70 billion during the Bush years. But, as with government spending, the Obama administration took a lamentable trend and pumped it full of steroids.

Unfortunately, the costs cited above are – if anything – on the low side. The final price tag is sure to be higher.

For one thing, the $26.5 billion figure is based on initial calculations made by the government agencies in question. As the Heritage report notes, these calculations almost always lowball the numbers. The agencies naturally want to minimize anything that makes their proposals look bad. For another, not every new regulation is counted – only the “major” ones – and not even all of those. But they all add up.

Worse, more regulations are on the way. The new health care law and the financial regulation law alone will result in hundreds of new rules.

“These initiatives embody a stunningly full regulatory agenda, indicating that this year’s record for regulatory increases will not stand for long,” the Heritage report concludes.

Americans hold politicians’ feet to the fire when taxes are too high, and rightly so. It’s time they did the same thing when it comes to regulations.

Ed Feulner is president of the Heritage Foundation.