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And the Beat Goes On

Eakinomics: And the Beat Goes On

AAF’s Dan Bosch is out with insights into the administration’s Fiscal Year 2019 regulatory budget results released by the Office of Information and Regulatory Affairs (OIRA) which showed net savings of $13.5 billion in reduced compliance costs. This was a bit less than the announced target of $17.9 billion, but still represents a tremendous success.

As documented in AAF’s RegRodeo database, the cost of all final rules (including those of independent agencies and non-significant regulatory actions) issued during the Obama Administration equaled $890 billion in costs over its 8 years, an average of about $111 billion per year. In stark contrast, the Trump Administration’s regulatory budget achieved savings of $8.1 billion in FY 2017 and $23.4 billion in the FY 2018.

The mechanism for this U-turn from festooning the economy with regulatory costs is imposing budgets on the agencies. Each year, OIRA announces the maximum that each agency is permitted to add to the cost of the regulatory state; for the Trump Administration these caps have been either zero or a negative number. This gives the agency the target but does not dictate which rules to impose or eliminate.

In FY 2019, 18 of the 25 agencies met or exceeded their regulatory budget cap, led by the Department of Health & Human Services. In total, the agencies issued 150 deregulatory actions versus 35 significant regulatory actions — a 4.3-to-1 ratio that is bigger than “two out, one in” target set by Executive Order 13,771. For those that failed to meet their target, the agencies will have to develop a plan for how it plans to address the shortfall in the future.

The success thus far has been nothing but astonishing. Nevertheless, the administration announced its savings target for FY 2020 of $51.6 billion reduced costs, an aggressive continuation of its deregulatory successes to date.

Disclaimer

Fact of the Day

The November U-6 (the broadest measure of unemployment) decreased to 6.9 percent.