Category Archives: regulation

CEI Podcast for April 5, 2012: The Export-Import Bank


Have a listen here.

Every year, Washington spends more than $90 billion on corporate welfare – giving taxpayer dollars to private businesses. The Export-Import Bank is one of the most flagrant corporate welfare programs. A vote to reauthorize it recently failed both Houses of Congress, but will likely come up again soon. Vice President for Strategy Iain Murray thinks the Export-Import Bank should become an ex-bank.

CEI’s Battered Business Bureau: The Week in Regulation


Just another week in the world of regulation:

  •  76 new final rules were published last week, up from 75 the previous week. That’s the equivalent of a new regulation every 2 hours and 13 minutes, 24 hours a day, 7 days a week. All in all, 876 final rules have been published in the Federal Register this year. If this keeps up, the total tally for 2012 will be 3,563 new rules.
  •  2,191 new pages were added to the 2012 Federal Register last week, for a total of 19,487 pages. At this pace, the 2012 Federal Register will run 78,577 pages.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. The 15 such rules published so far in 2012 cost at least $15.2 billion. Two of the rules do not have cost estimates, and a third cost estimate does not give a total annual cost. We assume that rules lacking this basic transparency measure cost the bare minimum of $100 million per year. The true cost is almost certainly higher.
  •  There were 18 significant actions this week, as defined by Executive Order 12866. Two of them are economically significant. So far, 112 significant final rules have been published in 2012.
  •  15 of this week’s final rules affect small business. So far this year, 165 final rules affect small businesses. 28 of them are significant rules.

Highlights from final rules published this week:

  • OSHA is revising its standards for hazard communication. The changes include “revised criteria for classification of chemical hazards; revised labeling provisions that include requirements for use of standardized signal words, pictograms, hazard statements, and precautionary statements; a specified format for safety data sheets; and related revisions to definitions of terms used in the standard, and requirements for employee training on labels and safety data sheets.” The estimated annual cost is expected to be $201 million.
  •  Regulations from the health care bill continue to hit the books.  One new rule, which sets standards for health insurance exchanges, is expected to cost $900 million in 2012. The total estimated cost from 2012-2016 is $3.4 billion.
  • The Equal Opportunity Employment Commission has a new rule on “Disparate Impact and Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act

For more data, updated daily, go to TenThousandCommandments.com.

The $400 Pizza

Baseball season is coming up. This time of year I’ll usually read a book about baseball to psyche myself up for the season. Some of the best ones I’ve come across in recent years are George Vecsey’s Baseball: A History of America’s Favorite Game and George Will’s Men at Work. This year I chose Ball Four by Jim Bouton.

Bouton was a pitcher who bounced around the league after having early success with the Yankees. Ball Four is a diary of his 1969 season with the expansion Seattle Pilots, who lasted only one year as a franchise; after the season ended they moved to Milwaukee and became the Brewers. Bouton ended the 1969 season with the Houston Astros after a late-season trade. Besides being wickedly funny, the book is something of a tell-all, and is surprisingly cynical for a book about a children’s game. It also made him persona non grata in the league.

What does all that have to do with the title of this post? Ten years after Ball Four came out, Bouton added an epilogue titled “Ball Five” for a new edition. In it he writes about his post-playing career as a sports reporter for New York-area tv stations, and he shares a story about friend-of-CEI John Stossel:

I also had a lot of respect for our intrepid consumer reporter John Stossel who exposed rip-offs in the marketplace. I particularly remember one of John’s rip-off stories that never got on the air. John was doing an exposé on the fast food industry and one Sunday he bought a pizza for $400. The reason it cost $400 was not because of restaurant business practices but because of television labor practices. John needed a pizza for a prop but he couldn’t get it himself. A set decorator had to get it. Then a prop man had to hold it. Then a stagehand had to give it to him. By the time they figured out the overtime and holiday pay, it came to something like $400. Of course, if John had tried to expose the cost of the television pizza he might have had to finish his story in a suddenly darkened newsroom.

Bouton doesn’t say in what year Stossel’s story didn’t air. So let’s assume it’s 1980, when he wrote the chapter. According to the Minneapolis Fed’s handy inflation calculator, that $400 pizza would cost $1,128.43 today.

CEI’s Battered Business Bureau: The Week in Regulation


Just another week in the world of regulation:

  •  75 new final rules were published last week, up from 72 the previous week. That’s the equivalent of a new regulation every 2 hours and 15 minutes, 24 hours a day, 7 days a week. All in all, exactly 800 final rules have been published in the Federal Register this year. If this keeps up, the total tally for 2012 will be 3,528 new rules.
  •  1,386 new pages were added to the 2012 Federal Register last week, for a total of 17,296 pages. At this pace, the 2012 Federal Register will run 75,860 pages.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. The 13 such rules published so far in 2012 cost at least $15.2 billion. Two of the rules do not have cost estimates, and a third cost estimate does not give a total annual cost. We assume that rules lacking this basic transparency measure cost the bare minimum of $100 million per year. The true cost is almost certainly higher.
  •  There were 18 significant actions this week, as defined by Executive Order 12866. Three of them are economically significant. So far, 105 significant final rules have been published in 2012.
  •  So far this year, 150 final rules affect small businesses. 25 of them are significant rules.

Highlights from final rules published this week:

  • The biggest regulation of the week came out on Friday to implement part of the health care bill. A change in Medicaid eligibility requirements would increase federal spending by $164 billion over five years by OACT’s estimate. CBO estimates a $162 billion spending increase over 5 years. That’s an average of $32.4 to $32.8 billion per year. For Battered Business Bureau purposes, I am listing its cost as zero since its main cost is on-budget government spending, not off-budget compliance costs.
  •  A new rule governing living organisms inside ships’ ballast waters will cost $92 million per year, but it’s still classified as economically significant. As originally proposed, it would cost an estimated $167 million per year.
  • Another health care regulation covering “Standards related to Reinsurance, Risk Corridors, and Risk Adjustment” will cost nothing in 2012 or 2013. But it will cost $11 billion in 2014, and rise to $18 billion in 2015 and 2016. For Battered Business purposes, I have listed its cost as zero for 2012’s regulatory costs.

For more data, updated daily, go to TenThousandCommandments.com.

On the Radio – Regulation

Tomorrow morning around 8:00, I’ll be on the Rob and Dave show on Atlanta’s WGST 92.3 FM to talk about regulation. Non-Georgians should be able to listen live at this link (look for a listen live button near the top of the page).

CEI’s Battered Business Bureau: The Week in Regulation


Just another week in the world of regulation:

  •  72 new final rules were published last week, up from 64 the previous week. That’s the equivalent of a new regulation every 2 hours and 20 minutes, 24 hours a day, 7 days a week. All in all, 725 final rules have been published in the Federal Register this year. If this keeps up, the total tally for 2012 will be 3,492 new rules.
  •  1,459 new pages were added to the 2012 Federal Register last week, for a total of 15,910 pages. At this pace, the 2012 Federal Register will run 76,492 pages.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. The 10 such rules published so far in 2012 cost at least $15.11 billion. Two of the rules do not have cost estimates, and a third cost estimate does not give a total annual cost. We assume that rules lacking this basic transparency measure cost the bare minimum of $100 million per year. The true cost is almost certainly higher.
  •  There were 13 significant actions this week, as defined by Executive Order 12866. One of them is economically significant. So far, 96 significant final rules have been published in 2012.
  •  So far this year, 127 final rules affect small businesses. 22 of them are significant rules.

Highlights from final rules published this week:

  • A rule doesn’t have to be economically significant to be expensive. A DEA rule on “Controlled Substances and List I Chemical Registration and Reregistration Fees” has an astoundingly precise estimated cost of $76,226,568.
  •  The Defense Department is still implementing parts of the Privacy Act of 1974.
  •  The Coast Guard sets the schedules for raising and lowering drawbridges across the country. Now, this isn’t rocket science – bridge up, bridge down. One would think local governments could handle such a complicated task on their own. But apparently they can’t. In fact, on Tuesday, the Coast Guard published a rule temporarily revising drawbridge schedules in Morgan City, Louisiana to accommodate some bridge maintenance. Again, this isn’t rocket science – the bridge will be in the down position during maintenance.

For more data, updated daily, go to TenThousandCommandments.com.

Institute for Justice Sues the IRS

A new IRS proposal to require licensing all tax preparers would put a lot of people out of work. Not everyone can afford to pay for classes, exams, fees, and continuing education courses. It would also artificially tip the competitive scales in favor of H&R Block and other big tax prep firms. So the Institute for Justice is suing. This video explains why (click here if the embedded video doesn’t work):

The video doesn’t make an important argument: If the IRS has the power to grant licenses, it also has the power to take them away. Tax preparers had better be careful not to fight too hard for their clients’ interests. Nice career you have there. Shame if anything were to happen to it.

Caleb Brown and I wrote about that angle in a piece for Investor’s Business Daily.

CEI’s Battered Business Bureau: The Week in Regulation


Just another week in the world of regulation:

  •  64 new final rules were published last week, down from 89 the previous week. That’s the equivalent of a new regulation every 2 hours and 38 minutes, 24 hours a day, 7 days a week. All in all, 653 final rules have been published in the Federal Register this year. If this keeps up, the total tally for 2012 will be 3,464 new rules.
  •  1,490 new pages were added to the 2012 Federal Register last week, for a total of 14,451 pages. At this pace, the 2012 Federal Register will run 76,867 pages.
  •  The 9 economically significant rules published so far in 2012 cost at least $15.01 billion. Two of the rules do not have cost estimates. We assume that rules lacking this basic transparency measure cost the bare minimum of $100 million per year. The true cost is almost certainly higher.
  •  There were 10 significant actions this week, as defined by Executive Order 12866. For the second week in a row, none of them are “economically significant” final rules, meaning a cost $100 million or more per year. So far, 88 significant final rules have been published in 2012.
  •  So far this year, 110 final rules affect small businesses. 19 of them are significant rules.

Highlights from final rules published this week:

  •  The Fish and Wildlife Service issued a rule to “recognize the recent change to the taxonomy of the currently endangered plant taxon, Monardella linoides ssp. viminea, in which the subspecies was split into two distinct full species, Monardella viminea (willowy monardella) and Monardella stoneana (Jennifer’s monardella).” M. viminea will retain its endangered status; M. stoneana is not considered to be endangered. They are herbs that grow in the San Diego area.
  •  The FDA made some mistakes in a recent rule involving new drugs for use in animal feeds. They issued a correction on Friday.
  •  The FCC is busy crafting a “National Broadband Plan for Our Future.” One wonders how its results will compare to its intentions.

For more data, updated daily, go to TenThousandCommandments.com.

CEI Podcast for March 8, 2012: IRS Moves to Fund Foreign Dictators


Have a listen here.

A new IRS regulation hits the trifecta of enriching foreign dictators, helping them crush dissent, and would raise no revenue for the U.S. government. Vice President for Strategy Iain Murray explains. Unlike most other countries, the U.S. taxes income its citizens earn abroad. So, to encourage foreign banks to cooperate with the IRS, it is requiring U.S. banks to report to foreign countries, even dictatorships, on their citizens’ U.S. holdings. Governments can then use this information to find and punish dissenters.

Corporate Welfare for Farmers

In a recent blog post, I describe the Agricultural Marketing Service’s (AMS) Beef Promotion and Research “checkoff” program as corporate welfare. The agency’s Public Affairs Director disagrees. In an email, he asked me to issue a correction. I would, but the facts won’t allow it. Still, some clarification would be helpful.

He claims that “Zero appropriations are used” in AMS’s research and promotion activities. Note the use of the word “appropriations” instead of “taxes.” This is a sneaky use of language. It doesn’t matter if Congress appropriates AMS money or not. The relevant question is whether AMS uses tax dollars to advertise for private businesses. It does.

Under federal law, farmers producing certain foods (beef, pork, milk, honey, various crops, etc.) are assessed fees. The AMS uses the revenue to promote those products. Those “Got Milk?” and “The other white meat” ads are prime examples.

The “Certified Angus Beef,” program, on the other hand, is a wholly private, voluntary marketing program supported by qualified producers of that particular cattle breed. But AMS’s beef checkoff assessment is mandatory (that is, a tax).

AMS argues that the entire industry benefits from collaborative promotion, though the Congressional Research Service explains that it’s not clear whether or to what extent this is true. What IS clear is that not all producers benefit to the same extent — those Certified Angus producers and others who sell branded products have to pay the tax to support advertising for their un-branded competitors.

And, though many beef producers love the program, many others would prefer not to participate at all. What’s more, farmers pass at least part of those fees on to consumers in the form of higher prices. We all get to share in the burden.

AMS’s rationale is that it’s difficult for farmers to advertise individually. Of course, trade associations already exist for beef, dairy, and other agricultural products. If farmers wish to advertise collectively, they can easily do so through their trade associations.

Checkoff program supporters will inevitably argue that purely voluntary collective action allows free riders to benefit from the efforts of others. But it’s pretty clear that the Certified Angus folks have found a way to prevent defection. There is no need for Washington to get involved. (Perhaps the AMS should rebrand itself as the Department of Redundancy Department?)

In the end, Washington is spending tax money on ads for private businesses in a way that benefits some at the expense of others. This is corporate welfare.

(Hat tip to my colleague Greg Conko for his helpful comments.)