Growth in Regulators’ Budget Slowed by Fiscal Stalemate

Editor’s Note:  The study “Growth in Regulators’ Budget Slowed by Fiscal Stalemate: An Analysis of the U.S. Budget for Fiscal Years 2012 and 2013” is attached below.  The study is published jointly by the Regulatory Studies Center at George Washington University and the Weidenbaum Center on the Economy, Government, and Public Policy at Washington University (St. Louis). 

The report’s Executive Summary is reprinted below.

This report tracks the “regulators’ budget,” the portion of the fiscal budget devoted to developing and enforcing federal regulations. We examine the President’s budget estimate for outlays in fiscal year (FY) 2013, as well as estimated outlays for FY 2012 as reported in the Budget of the United States Government for Fiscal Year 2013. We also present data on annual outlays from fiscal year 1960 to the present. Though these on-budget costs of regulation represent a small fraction of the full burden of regulations to society (and do not provide information on regulations’ benefits) the time-series data presented here offer useful insights into the growth and changing composition of regulation over the last half-century.

The regulators’ budget for fiscal years 2012 and 2013 reflects significant regulatory priorities such as homeland security, food and drug regulation, and financial market regulation, as well as the budget compromise reached between the President and Congress in December 2012, and continuing actions to cut domestic spending. As estimated here, the President’s proposed budget for regulation seeks $58.7 billion in FY 2013, a real (inflation-adjusted) decline of 2.1 percent from estimated FY 2012 outlays, which at $59.1 billion, are 8.6 percent higher than FY 2011.

The largest budget increases in 2012 have gone to agencies in the Department of Homeland Security, including the Transportation Security Administration, Customs and Border Patrol (CBP), and the Coast Guard; the Food and Drug Administration (FDA); the Patent and Trademark Office (PTO); the Securities and Exchange Commission (SEC); and the Federal Deposit Insurance Corporation. The President requests additional increases for some of these agencies in 2013 (FDA, CBP, Coast Guard, PTO, SEC) but not others (notably TSA). Overall, the budget allocates larger percentage increases to agencies that conduct economic regulatory activities (with real increases of 15.6 percent and 4.6 percent in FY 2012 and 2013) than to those that issue social regulations (after an increase of 7.2 percent in FY 2012, these agencies are budgeted for a cut of 3.6 percent in FY 2013).

The Budget estimates that 283,615 full-time federal employees will administer regulations in2012, and 290,690 in 2013. These reflect staffing increases of 2.5 percent each year, with additional personnel 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.

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



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