Having lost the presidential election, the current administration will try to finalize as many of its favored regulations and confirm as many of its judicial appoints as possible before January 20, 2025. The cost of complying with all those regulations will be passed on to consumers in higher prices and/or reduced quality and service. The Office of Management and Budget (OMB) puts the price of existing regulations at approximately $300 billion annually. All paid for through the higher goods and services prices, a “regulatory” tax.
NFIB’s 2024 Small Business Problems and Priorities surveyed a large sample of small business owners asking them to evaluate a list of 75 problems by importance. The second most burdensome issue from the list is the “Cost of Supplies/Inventories.” “Unreasonable government regulations” ranked seventh, with 24% reporting it as critical. Additionally, the problem of finding out about regulatory requirements ranked 27th. Complex rules get promulgated, but the firms impacted by them are often in the dark (yet liable for any non-compliance). Firms must discover when a relevant regulation is posted, figure out how to comply with it, and how to cover the cost of discovery and physical compliance.
Proposed and promulgated regulations are posted in the Federal Register (FR). Administrations recently have rushed in their last term to finalize regulations. Trump finalized 119 significant regulations and Biden 233 (Federal Register). Here is a sample from the Federal Register: microwave ovens (88 FR 39912), conventional ovens (89 FR 11434), stovetops (89 FR 11434), refrigerators (89 FR 3026), freezers (89 FR 3026), washing machines (89 FR 19026), dish washers (89 FR 31398), clothes dryers (89 FR 18164), water heaters (89 FR 37778), air conditioners (89 FR 44052), ceiling fans (88 FR 40932), furnaces (88 FR 87502), boilers (88 FR 60152), heat pumps (89 FR 44052), lamps (89 FR 28856). The 90,402-page 2023 Federal Register contains 3,018 final rules and regulations. How does a small business keep up with compliance? The largest of these are designated as “economically significant,” but all of them require costly compliance and take time, an owner’s most valuable asset.
Regulators (mostly unelected) pursue their particular interests without accounting for the aggregate cost they impose on the economy or a careful evaluation of the benefits vs. costs. The regulatory process should be streamlined and held to high standards of social profitability.
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