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A PERPETUALWORKING PAPER & EBOOK
TIP OF THE COSTBERG
 
On the Invalidity of All Cost of Regulation Estimates& the Need to Compile Them Anyway
Fall 2012 Edition
[un-copyedited DRAFT]by Wayne Crews
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Contents
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Introduction: The $1.806 Trillion Annual Cost of Regulation
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Tip of the Costberg’s
Simple Framework 
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The Costs of Benefits
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Costs in Dollars, Costs In Common Sense
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Costs are Subjective
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Incentives to Understate Costs are Equal to Incentives to Overstate Costs
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On the Hotheadedness and Partisanship Over Efforts to Calculate Regulatory Costs; Or, More ReasonsOfficial Disclosure Needs Amplification
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The Administrative and Enforcement Costs of Regulations
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Regulatory Costs In the Days Before “Trillion”:Or, Estimated Regulatory Costs at the Turn of the Century (Give or Take)
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A Sense of Proportion: What Isn’t Reviewed Annually By OMB
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A Baseline for Aggregate Annual Economic Regulation Costs: $373 Billion
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A Baseline for Aggregate Annual Social Regulation Costs: $406 Billion
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Additional Executive Agency Major Rule Costs Presented by OMB (But Not Tallied): $22.3 Billion
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Additional Executive Agency Major Rules Without Cost Information: $13 Billion Placeholder 
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Independent Agencies’ Annual Regulatory Costs: $4.58 Billion
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Paperwork and Information Collection Costs
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Paperwork Hours and Hourly Costs
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Tax Compliance Costs: $299.8 Billion
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Other Independent Agency Paperwork Costs: $21.56 Billion
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Tip of the Costberg? Regulatory Cost Estimates Beyond the OMB and SBA Tallies
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Executive Agency Regulatory Costs
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Dep’t of Agriculture: $9.05b
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Dep’t of Commerce: $1.801b
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Vice president for policy at Competitive Enterprise Institute (www.cei.org); bio athttps://plus.google.com/113095973595331364544/about.If you’re aware of a better estimate for any given component thanI’ve been able to secure, contact me atwww.tenthousandcommandments.com.While bloopers are my fault alone and I don’t ascribe agreement with my approach to others, I thank many individuals for comments and/or inspiration for the subjectmatter; among them Daniel Riviera, Christopher Conover, Richard Williams, Jerry Ellig, Dave Bier, Vincent Vernuccio,Sam Kazman, Marlo Lewis, Iain Murray, Fred Smith, Susan Dudley, William Yeatman, Ryan Young, Ivan Osorio.
 
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Dep’t of Education: $3.032b
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Dep’t of Energy: $9.089b
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Dep’t of Health & Human Services: $184.805b
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Dep’t of Homeland Security: $55.331b
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Dep’t of Housing & Urban Development: $1.827b
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Dep’t of the Interior: $5.321b
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Dep’t of Justice: $1.253b
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Dep’t of Labor: $121.987b
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Dep’t of Transportation: $64.226b
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Dep’t of the Treasury: $$1.32b
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Environmental Protection Agency: $352.997b
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U.S. Access Board (ATBCB): $851mil.
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Federal Acquisition Regulation: $1.356b
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Independent Agency and Certain Sectoral Regulatory Costs
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Antitrust: $2.34b
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Federal Communications Commission: $141.58b
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Financial Services: $102.46b
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Federal Energy Regulatory Commission (paperwork): $336mil.
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Federal Trade Commission (paperwork): $2.85b
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Consumer Product Safety Commission: $193mil.
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EEOC: $122mil.
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 Nuclear Regulatory Commission, plus paperwork: $414mil.
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E-gov (paperwork): $380mil.
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 NASA (paperwork): $107mil.
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 Nat’l Science Foundation (paperwork): $231mil.
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Small Business Admin (paperwork): $43mil.
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Social Security Admin (paperwork): $1.06b.
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Privacy Regulation: $1b.
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Immigration Restrictions: $12b.
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On Regulatory Costs Not Included In
Tip of the Costberg 
 
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Systemic/Regulatory Process Omissions
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Loss of Liberty Omissions
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Economic Cost and Impact Omissions
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Unfavorable Health and Safety Impact Omissions
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Job Impact Omissions
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Conclusion: Measure It, Control It
Introduction: The $1.806 Trillion Annual Cost of Regulation
Some think federal regulations cost boatloads. Others think what’s notable instead about regulatorycosts is their “unbearable lightness.”
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 Whether regarded as high or not, regardless of subjective views on the impact and incidence of regulatory burdens, regulatory compliance costs shouldered by citizens and the enterprises they createdeserve better measurement and explicit expression in official documentation.
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 But cost accounting isthe exception rather than the rule.A government of the United States’ magnitude needs to quantify for the public benefit the costs of itsregulatory interventions, which arguably rival on-budget spending levels of only a decade ago. Itmatters also because we tend to think of regulations applying to the generation of our $15 trillion GDP, but regulations also apply to the country’s abundant capital stock,
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 not just that flow.
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 Regulatory cost disclosure should be made comparable to what we see for government spending in theannual fiscal budget and in Congressional Budget Office analyses. This subject matter ought to be part
 
3of annual federal metrics in the federal budget, increased Office of Management and Budget (OMB)reporting, the
 Economic Report of the President 
, CBO-style roundups or other form.
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Congress alsoshould supervise the regulatory enterprise via a Regulatory Reduction Commission or other review body for the existing body of regulation; and experiment with regulatory budgeting, review schedules,expiration dates and congressional approval for new rules.
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 The federal government seems busy fighting with itself over the magnitude of regulatory costs (TheOMB’s Office of Information and Regulatory Affairs (OIRA) former director Cass Sunstein told acongressional committee that the regulatory cost figures released by the Small BusinessAdministration’s (SBA) Office of Advocacy have “become a bit of an urban legend.”
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 But as we’ll see,OMB’s own estimates used to be in the same ballpark, and many categories of cost are now neglected by OMB. While OMB officially reports amounts of only up to $88.6 billion in 2010 dollars, the non-tax cost of government intervention in the economy, without performing a sweeping survey, appears tototal up to $1.806 trillion annually. Give or take.
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But probably give; See
The Total Annual Cost of   Federal Regulation
 for a summary chart.
 
CHART: The Total Annual Cost of Federal Regulation
http://bit.ly/O0dzeF We can say, circa 2013, according to back of the envelope surveys and roundups, with gaps big enoughto fit the beltway through, that up to $1.806 trillion annually and in many categories perhaps evenconsiderably more, is a defensible assessment of the annual impact on the economy. This assessment is based on a roundup of a subset of existing federal regulations, mandates, transfers, bans, prohibitionsand interventions of all kinds. Also pushing costs up, yet not tallied here, are the unfathomable costs of the unmeasured, the unmeasurable, and the ignored and unacknowledged.Right now, officially reported regulatory costs (as will be seen) total up to $88.6 billion based on OMBinformation. The question for decisionmakers is whether such costs are actually representative of thesweep of regulatory costs and thus of little concern, or are real regulatory costs submerged beneath thesurface, increasingly rendering federal spending ($3.6 trillion in fiscal year 2011) the real “tip of thecostberg” while regulatory growth of government happens out of plain view.
Our $5.4 Trillion Federal Government
Is Federal Regulation Merely the Unimportant “Tip of the Costberg”—Or Mostly Submerged?
 Not entirely to scale.
 
Federal Spending: $3.598 trillion
 
Unreported Regulatory Costs (so far): up to est. $1.717 trillionOMB-reported regulatory costs, 2001- present: up to $88.6 billion annually
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