The cost of regulation and bureaucracy
The Cost of Bureaucracy
Regulation: What's it to ya?
In 1993, the nation's regulatory system cost Americans $581 billion --
about $5,900 per household per year. Other fun facts:
* The annual cost of federal regulation is projected to rise to $662
billion by the year 2000. ("CEOs Call for Sweeping Reform of U.S.
Government Regulation," PR Newswire, June 21, 1994, citing Thomas
D. Hopkins, "Costs of Regulations: Filling the Gaps," Reg. Info.
Service Center, Aug. 1992)
* If the hours spent complying with the tax code were put to
productive work, they'd represent the entire annual outputs of the
U.S. auto, truck and aircraft industries. (The Dallas Morning
News, June 30, 1994)
* "The Lord's Prayer is 66 words, the Gettysburg Address is 286
words, and there are 1,322 words in the Declaration of
Independence. Yet, government regulations on the sale of cabbage
total 26,911 words." (Letter from David McIntosh [former member of
V.P. Quayle's Council on Competitiveness] to Grover C. Norquist,
Oct. 13, 1992)
* Between 1987 and 1992, the federal paperwork burden increased 261%
to nearly seven billion hours, according to the GAO, with tax
requirements comprising most of that burden. And regulatory costs
tend to hit small business harder than larger companies which
"often welcome new regulations because they know the regulations
will help consolidate their market share and wipe out small
business competitors." (Karen Kerrigan, president of the Small
Business Survival Committee, Investor's Business Daily, Sept. 8,
* "President Clinton's first year saw the most regulatory activity
since President Carter's last. The page total for 1993 of the
Federal Register was 69,608 pages, the third highest total of all
time . . . [And] from 1988 to 1992 regulatory staffing increased
by over 20 percent to almost 125,000 employees. Under President
Clinton, the largest number of Federal bureaucrats ever, 128,615
people, were called for to run his Federal regulatory apparatus."
(Statement by Congressman Tom Delay [R-TX], Congressional Record,
May 12, 1994)
And then there's the human cost...
Excerpted from the Wall Street Journal, Sept. 16, 1994.
Bill Pierce, owner of a Cincinnati engineering firm "let his salaried
employees, most in their 50s, set their own schedules. All they had to
do was work 80 hours every two weeks. If they chose to work fewer
hours for less pay, or more for straight time, that was fine.
Mr. Pierce says the employees, with annual salaries of $45,000 to
$70,000, treasured the system's flexibility. Enter the Department of
Labor. . . it filed a lawsuit in federal court in January 1989
accusing him of flouting an obscure provision of the 1938 Fair Labor
In a new interpretation of that law, it argued that any salaried
employee docked for unpaid leave in increments of less than one day
automatically becomes an hourly worker. It ordered him to pay nearly
$50,000 in back wages, penalties and interest.
Mr. Pierce says he spent a small fortune in legal fees and thousands
of hours fighting the department's charges. His business suffered, and
he began letting his employees go. In early 1992, a judge ruled he
owed only $3,100. But by then, he says, he was broke.
He says he laid off his last employee last December.