CEI’s Battered Business Bureau: The Week in Regulation

As mentioned earlier, something of a regulatory midnight rush is happening right now. The Federal Register topped 2,000 pages for the third time in four weeks—a rare accomplishment. It is now on pace to break last year’s all-time record. New rules range from flight simulators to the EPA’s in-house rules for corporate handouts.

On to the data:

  • Last week, 68 new final regulations were published in the Federal Register, after 58 the previous week.
  • That’s the equivalent of a new regulation every two hours and 28 minutes.
  • With 1,274 final regulations published so far in 2016, the federal government is on pace to issue 3,250 regulations in 2016. Last year’s total was 3,406 regulations.
  • Last week, 2,065 new pages were added to the Federal Register, after 2,170 pages the previous week.
  • Currently at 32,131 pages, the 2016 Federal Register is on pace for 81,967 pages. This would exceed the 2015 Federal Register’s all-time record adjusted page count of 81,611.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. 11 such rules have been published so far in 2016, none in the last week.
  • The running compliance cost tally for 2016’s economically significant regulations ranges from $1.21 billion to $2.20 billion.
  • 105 final rules meeting the broader definition of “significant” have been published this year.
  • So far in 2016, 250 new rules affect small businesses; 40 of them are classified as significant.

Highlights from selected final rules published last week:

For more data, see Ten Thousand Commandments and follow @10KC and@RegoftheDay on Twitter.

Another Ringing Endorsement

Politico: Ivanka Trump on her father: ‘He’s not a groper’

How the Overtime Rule Hopes to Design Higher Salaries, But Can’t

The Labor Department has just issued a new overtime pay regulation for salaried employees. Under the new rule, all salaried workers earning less than $47,476 per year must be given overtime pay when they work more than 40 hours in a given week. This roughly doubles the previous threshold of $23,660. This will affect an estimated four million workers, raising their wages by $12 billion over the next decade, or an average of $1.2 billion per year.

By my calculations, that’s roughly $300 per worker per year. That can certainly help families with bills to pay—the problem is that this pay bump comes with tradeoffs. These range from reduced salaries to reduced hours—avoiding overtime pay altogether—to reduced non-wage benefits such as paid vacation, free parking, free meals, and other perks. These tradeoffs could easily cancel out any pay increases, leaving working families no better off than before, and possibly worse off.

Trey Kovacs is CEI’s resident expert on the overtime rule (see also CEI’s coalition letter we sent to Capitol Hill). But I cannot resist commenting on Labor Secretary Tom Perez’s remark that “[t]hese good paying middle class jobs were not a fluke brought about by an invisible market forces. They were good paying middle class jobs by design[.]”

F.A. Hayek’s most famous quote, from his final book, The Fatal Conceit, is “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” Secretary Perez has unintentionally played right into Hayek’s invisible hand.

Employers would be delighted to pay every single one of their employees minimum wage, from the lowest entry-level position all the way up to high-powered senior executives. But they can’t, because market forces won’t allow it. Markets are the reason middle class salaries exist at all. Absent any top-down direction from Secretary Perez or other political operators, employees leverage their skills to bargain for higher wages. If your employer isn’t paying you what your skills are worth, you can take your talents elsewhere.

High turnover and the constant training that goes with it hurt a company’s bottom line. That is why Henry Ford paid his workers very high wages by the standard of the time. As workers gained experience and skill, they created more value. Better for Ford’s bottom line to pay skilled workers a middle class wage and keep them around than to have to constantly search for and train rookies.

A similar process plays out all over the economy, from construction to accounting to photography. Middle class wages are the product of human action, not human design. People respond more readily to their incentives than to political orders. Bottom-up, not top-down.

If anything, the overtime rule gives employers an incentive to be less generous to their employees, not more. And that may be just what we see in the coming years. Secretary Perez’s design will likely turn out rather differently than he intends. This is unfortunate, but also completely foreseeable.

A Ringing Endorsement

Politico: Melania Trump on husband: ‘He’s not Hitler’

Deadline for Major New Regulations This Week?

An early midnight rush of controversial new regulations might be on the way over the next week or so. Why now instead of the very end of the Obama presidency? Because the Congressional Review Act gives Congress 60 legislative days to strike agency regulations—but if a session of Congress ends before those 60 days are up, the clock starts over with the new Congress. So if an agency issues a rule with 59 or fewer legislative days left, the next Congress will still be able to strike down the rule, and President Obama will not be in office to veto Congress’ action.

The congressional calendar is always subject to change, so the exact 60-day deadline isn’t set in stone. According to Sam Batkins of the American Action Forum, the likely dates range from May 17 to May 23. So if an agency wants to be certain its most controversial new rules are not struck down, it will likely issue them no later than May 23. Indeed, April was a busier month than usual for the Federal Register and for new rules. Ditto the first half of May.

Of course, there are reasons to be skeptical of a midnight rush continuing through this week. If the next president is a Democrat, she would likely veto any congressional efforts to strike regulations issued by a fellow Democrat. So while this election season has been as unpredictable as any, agencies may not have anything to worry about after all.

And if Donald Trump does win the GOP nomination, the GOP’s House and Senate majorities are at risk. That would eliminate any Congressional Review Act threat. Further, if Trump wins the presidency, his lack of a clear ideology means he might also veto Congress as well, even if both chambers stay Republican.

Finally, agencies work on their own timetables. Many regulations, especially the larger, more technical ones, are planned out years in advance, and can’t be written in a rush. The rulemaking process, which requires publishing a proposed version of the rule and a public comment period, is also not well-suited for expediting new rules.

So will the recent uptick in new regulations slow down in the next week? Time will tell. Keep an eye on this space.

CEI’s Battered Business Bureau: The Week in Regulation

The Federal Register broke the 30,000-page barrier last week, with new regulations covering everything from baked beans to e-cigarettes.

On to the data:

  • Last week, 58 new final regulations were published in the Federal Register, after 71 the previous week.
  • That’s the equivalent of a new regulation every two hours and 54 minutes.
  • With 1,206 final regulations published so far in 2016, the federal government is on pace to issue 3,242 regulations in 2016. Last year’s total was 3,406 regulations.
  • Last week, 2,170 new pages were added to the Federal Register, after 1,893 pages the previous week.
  • Currently at 30,066 pages, the 2016 Federal Register is on pace for 80,823 pages. The 2015 Federal Register had an adjusted page count of 81,611.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. 11 such rules have been published so far in 2016, one in the last week.
  • The running compliance cost tally for 2016’s economically significant regulations ranges from $1.21 billion to $2.20 billion.
  • 97 final rules meeting the broader definition of “significant” have been published this year.
  • So far in 2016, 238 new rules affect small businesses; 37 of them are classified as significant.

Highlights from selected final rules published last week:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

CEI’s Battered Business Bureau: The Week in Regulation

After a slow start, 2016 is back to a normal regulatory pace. The Federal Register is on a nearly 80,000-page pace, and the number of new rules is just a touch below normal. New rules from the last week range from trawls to FCC emergency alerts.

On to the data:

  • Last week, 71 new final regulations were published in the Federal Register, after 65 the previous week.
  • That’s the equivalent of a new regulation every two hours and 35 minutes.
  • With 1,148 final regulations published so far in 2016, the federal government is on pace to issue 3,261 regulations in 2016. Last year’s total was 3,406 regulations.
  • Last week, 1,893 new pages were added to the Federal Register, after 2,035 pages the previous week.
  • Currently at 27,896 pages, the 2016 Federal Register is on pace for 79,250 pages. The 2015 Federal Register had an adjusted page count of 81,611.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Nine such rules have been published so far in 2016, one in the last week.
  • The running compliance cost tally for 2016’s economically significant regulations ranges from $843 million to $1.68 billion.
  • 88 final rules meeting the broader definition of “significant” have been published this year.
  • So far in 2016, 225 new rules affect small businesses; 33 of them are classified as significant.

Highlights from selected final rules published last week:

  • A new children’s health insurance regulation under the Medicaid program will cost an estimated $113.8 million this year, with gradually increasing costs in future years. The total estimated cost over the period 2016-2020 is $638.3 million.
  • A relatively brief six pages to define the terms “portfolio reconciliation” and “material terms” for swaps transactions.
  • Remember those annoying FCC emergency alerts from 1980s television? Not only do they still exist in the age of the smartphone and the Internet, a new regulation is making them multilingual, so the FCC can needlessly annoy even more people.
  • The Energy Department deserves credit for enacting a transparency reform. Now, “an interested party can, within a 30-day period after [the] DOE posts a rule establishing or amending an energy conservation standard, identify a possible error in such a rule and request that DOE correct the error before the rule is published in the Federal Register.” Much more to do, but it’s a start.
  • Rationalizing trawls.
  • In a rather bitter bit of irony, the federal government offers financial assistance for burying Native Americans.
  • Federal fire safety requirements for certain health care facilities.

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

Seattle’s $15 Minimum Wage

A short writeup of Seattle’s new $15 minimum wage quotes me.

Ten Thousand Commandments

The brand new 2016 edition of Clyde Wayne Crews, Jr’s Ten Thousand Commandments report is out now. You can read it here. If you prefer the short version, Wayne and I did a short writeup for The Hill’s Congress Blog, emphasizing why presidential candidates should start talking about regulation:

We hear a lot about spending in candidate debates and speeches. But federal regulations impose estimated total costs on the economy of $1.88 trillion, roughly half the size of the federal budget, according to our findings, published in the 2016 edition of the Competitive Enterprise Institute’s annual Ten Thousand Commandments report.

So while politicians from both parties loudly complain about “waste, fraud and abuse” in taxing and spending, the costs of regulation mean the federal government is 50 percent more bloated than even the most strident stump speech would suggest. Indeed, if federal regulations were their own country, they would comprise the world’s 10th largest economy, ahead of Russia and behind India.

Read the whole piece here, or, better, the entire study here.

CEI’s Battered Business Bureau: The Week in Regulation

As the Federal Register passed the 25,000-page mark, new rules for the week ranged from fluorescent lamps to disaffected youth.

On to the data:

  • Last week, 65 new final regulations were published in the Federal Register, after 53 the previous week.
  • That’s the equivalent of a new regulation every two hours and 35 minutes.
  • With 1,077 final regulations published so far in 2016, the federal government is on pace to issue 3,244 regulations in 2016. Last year’s total was 3,406 regulations.
  • Last week, 2,035 new pages were added to the Federal Register, after 1,496 pages the previous week.
  • Currently at 26,003 pages, the 2016 Federal Register is on pace for 78,323 pages. The 2015 Federal Register had an adjusted page count of 81,611.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Eight such rules have been published so far in 2016, one in the last week.
  • The running compliance cost tally for 2016’s economically significant regulations ranges from $729 million to $1.56 billion.
  • 85 final rules meeting the broader definition of “significant” have been published this year.
  • So far in 2016, 203 new rules affect small businesses; 30 of them are classified as significant.

Highlights from selected final rules published last week:

For more data, see Ten Thousand Commandments and follow @10KC and@RegoftheDay on Twitter.