Federal regulatory spending budget to decrease next year

The budget for issuing and enforcing federal regulation is expected to decline in the 2013 fiscal year.

While the estimated cost of running regulatory agencies in fiscal year 2012 is $59.1 billion — an 8.6 percent increase over 2011 spending — President Barack Obama’s proposed budget for regulation declines to $58.7 billion in 2013.

The on-budget cost of regulation is detailed in a new report, Growth in Regulator’s Budget Slowed by Fiscal Stalemate: An Analysis of the U.S. Budget for Fiscal Years 2012 and 2013. The annual report is published by the Weidenbaum Center on the Economy, Government and Public Policy at Washington University in St. Louis and the George Washington University Regulatory Studies Center.

This report presents more than 50 years of data on the expenditures and staff employed to run federal regulatory agencies. These data are extracted from the Budget of the United States Government, prepared annually by the Office of Management and Budget and submitted by the president to the Congress.

This is the 34th edition of the report tracking the spending and staffing for the regulatory agencies as documented in the president’s budget. It includes data from 1960-2013.

The largest regulatory budget increases in 2012 and 2013 are going to:

• The Food and Drug Administration;
• the Patent and Trademark Office
• the Department of Homeland Security, in particular, Customs and Border Patrol and the Coast Guard. The study points out that a projected decrease in the Transportation Security Administration’s 2013 budget would offset its 2012 increase; and
• financial regulatory agencies, including the Securities and Exchange Commission, the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau.

“Regulations are an increasingly important aspect of modern American life, and yet measuring regulatory activity is challenging,” write co-authors Melinda Warren, director of the Weidenbaum Center Forum, and Susan E. Dudley, director of the George Washington University Regulatory Studies Center and research professor of public policy and public administration.

“Our ongoing effort to track the trends in federal regulatory agencies’ expenditures helps monitor one component of the impact of regulation—the direct taxpayer costs associated with developing, administering, and enforcing federal rules and regulations.”

The number of staff employed in federal regulatory matters is expected to reach 290,690 in 2013. This is an increase of about 7,000 employees over the 2012 number of 283,615.

Additional personnel will be assigned to develop and enforce homeland security regulations, financial market regulations, and patent and trademark decisions.

Personnel assigned to food inspection are projected to decline as a result of recent regulatory changes at the United States Department of Agriculture (USDA).

Spending and staffing for new regulatory activity authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act are included in the report, but those associated with the 2010 Patient Protection and Affordable Care Act are not.

The new Center for Consumer Information and Insurance Oversight (CCIIO) under the Centers for Medicare and Medicaid (CMS) is charged with implementing a number of regulatory activities, including ensuring compliance with insurance market rates, helping states review unreasonable rates and providing oversight for the State-Based Health Insurance Exchanges.

“The 2013 Budget did not allow us to distinguish between resources devoted to regulations that affect private sector behavior from those that affect entitlement spending,” say the authors. “We could not reliably break these numbers out of the CMS budget. Because we do not want to over-report, we decided not to include any of the CMS data.”

The full report is available online at wc.wustl.edu and regulatorystudies.gwu.edu.