Rounding into the Regulatory Backstretch

Eakinomics: Rounding into the Regulatory Backstretch The Biden Administration regulatory state has passed the quarter mark and is heading for the backstretch. The AAF Regulation Rodeo team has been giving the weekly play-by-play on the horse race and here is the latest: Of note, Biden and Trump are tied for the number of rules finalized (305), but Biden is “crushing it” (pun intended) with $195.8 billion in burden costs imposed on the private sector. Trump came in at $3.8 billion, which is roughly $12 million per rule, while Biden is at $642 million per rule. Similarly, the paperwork burdens are like night and day – 134.1 million paperwork hours (440,000 per rule) for Biden compared to 7.8 million (26,000 per rule) for the Trump Administration. This pattern fits Eakinomics’ expectation that the limited opportunity for legislative success would force the Biden Administration to drive its policy agenda through administrative action. The prospects of legislation look even dimmer if one looks forward, so stay tuned. It is worth noting that even excluding the super-costly Environmental Protection Agency rule on greenhouse gas emissions from vehicles, the Biden number is still $12 billion higher than under Trump. Similarly, the paperwork hours are inflated by about 80 million hours for the vaccine mandate rule that the courts have blocked. But there is a good question as to whether one wants to keep track of what the agencies want to do or what they are allowed to do. The mild surprise is the rapid early pace of the Obama Administration. After the midterm “shellacking” in 2010, the administrative actions were quite visible. But the table shows that even early in his first term, President Obama was chalking up final rules at the most rapid pace, albeit at a lower cost per rule ($178 million) than the current administration. Why should one care? Costly final rules are yet another cost shock to the business sector. The bad news about cost shocks is that they slow economic growth but raise inflation pressure at the same time. That is not the right economic medicine for this moment.