Report: Obama Regulatory Agenda Will Cost $143 Billion to Economy Next Year

Regulations include calorie postings for vending machines, standards for air conditioners

December 6, 2013

Upcoming regulations from the Obama administration in 2014 would cost the private sector $143.3 billion, according to a new report.

The American Action Forum (AAF) examined the "unified agenda," which lays out "regulatory priorities" for the next year, and was released shortly before Thanksgiving.

The report documents regulations for 2014 from Obamacare, the EPA, Department of Energy, and others, revealing a regulatory system on "autopilot" that covers everything from calorie postings in vending machines to efficiency standards for portable air conditioners.

The agenda includes 15 new "major" rules, which will cost at least $100 million per rule. Some of the more wide-ranging regulations, such as the Volker Rule, a banking regulation under Dodd-Frank financial reform, are not even included in the cost estimate.

The agenda outlines regulations that the administration is currently working on and hopes to finalize in the next year. Although it is likely some will be delayed, Sam Batkins, director of regulatory policy at American Action Forum, said the cost to the economy will depend on how quickly, or how slowly, agencies actually finalize regulations.

"Regulations, more or less, operate like hidden taxes," Batkins told the Washington Free Beacon. "Last year the administration admitted that we had about $30 billion in new regulatory burdens, and that’s just from cabinet agencies. Our estimate from all agencies was a little bit higher."

"But that’s $30 billion, that’s roughly the same amount that taxes increased this year, with higher income and capital gains taxes, and higher Medicare taxes, as well," he said.

Affordable Care Act regulations for the next year, if enacted, will cost $1.9 billion, including the calorie labeling provision, a rule that requires all food items in grocery stores to be marked. The Department of Health and Human Services plans to finalize the regulation in February, which will cost the industry an estimated $421.3 million, and take 10 million hours to comply.

"You’re talking about every single possible item that you eat," Batkins said. "A lot of that has already happened, when you’re buying from the grocery store. But if you’re going to Pizza Hut, then how would specials be affected? There are hundreds—thousands different possible options you can get with some types of pizza places."

"I think they understand that there’s a lot of maddening complexity, and whenever you see figures like 10 million plus hours of paperwork you know that there’s a lot involved," he said.

Batkins said many of the remaining regulations under the Affordable Care Act must be completed by next year due to deadlines set in the law.

"A lot of the Obamacare rulemaking will have to be finalized by 2014," he said. "Something that’s not even on this list is the employer mandate, and the bulk of the analysis that has to go into that."

EPA’s Tier 3 Motor Vehicle Emission and Fuel Standards will require refiners to lower the amount of sulfur content in gasoline to 10 parts per million.  The rule is scheduled to be final in February 2014, with an estimated cost of $35 billion.

"They’re going to pass these costs along in the form of gas prices, the only question is how much," Batkins said. "The EPA says about a cent, you talk to industry, the figure is as high as 10 cents."

The report also details recently finalized regulations, which are not included in the cost estimate for next year. The list includes an affirmative action mandate for federal contractors to hire persons with disabilities, which was published in November, carrying $1 billion in costs, and 3.3 million hours in paperwork.

The rule states that the Federal Contract Compliance Programs Office requires contractors to "engage in affirmative action and provide equal employment opportunity without regard to race, color, religion, sex, national origin, disability, or status as a protected veteran."

Overall, at the current pace of rulemaking for 2013, AAF estimates that the regulatory burden for the year will eclipse $110 billion.

"The regulatory system sort of runs on autopilot, and even the administration doesn’t have control over a lot of what happens," Batkins said. "So, you see this every year, it flies under the radar, and it’s mainly because getting all this data together is not easy. You can’t just go to the historical tables at the White House budget to see what the total cumulative regulatory burden is for all agencies."

"I think that you see the regulatory apparatus on autopilot and it’s $30 billion a year at least that often gets overlooked," he said.

Published under: EPA , IRS , Obamacare