This Week in Ridiculous Regulations

The big news of the week was the guilty verdicts in the Derek Chauvin murder trial. Senate Republicans continued their longtime strategy of bargaining with themselves by proposing $568 billion in infrastructure spending. This would leave Democrats free to use the reconciliation process on the remaining $1.4 trillion or so from their spending proposal without worrying about sacrificing any of the GOP bill’s projects in negotiations. Meanwhile, agencies issued new rules ranging from parachutes to halibut sharing.

On to the data:

  • Agencies issued 65 final regulations last week, after 22 the previous week.
  • That is the equivalent of a new regulation every two hours and 35 minutes.
  • With 970 final regulations so far in 2021, agencies are on pace to issue 3,142 final regulations this year. 2020’s total was 3,149 final regulations.
  • Agencies issued 47 proposed regulations in the Federal Register last week, after 39 the previous week.
  • With 687 proposed regulations so far in 2021, agencies are on pace to issue 2,231 proposed regulations this year. 2020’s total was 2,021 proposed regulations.
  • Agencies published 507 notices last week, after 350 notices the previous week.
  • With 6,752 notices so far in 2021, agencies are on pace to issue 21,922 notices this year. 2020’s total was 22,480.
  • Last week, 1,664 new pages were added to the Federal Register, after 1,122 pages the previous week.
  • The average Federal Register issue this year contains 285 pages.
  • With 21,915 pages so far, the 2021 Federal Register is on pace for 71,153 pages in 2021. The 2020 total was 87,352 pages. The all-time record adjusted page count (subtracting skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. There are two such rules so far in 2021, none from the last week. Agencies published five economically significant rules in 2020, and four in 2019.
  • The running cost tally for 2021’s economically significant rules ranges from net savings of $100.7 million to net costs of $362.5 million. The 2020 figure ranges from net savings of between $2.04 billion and $5.69 billion, mostly from estimated savings on federal spending. The exact numbers depend on discount rates and other assumptions.
  • Agencies have published 15 final rules meeting the broader definition of “significant” in 2020, with one in the last week. This is on pace for 48 significant rules in 2021. 2020’s total was 79 significant final rules.
  • In 2021, 190 new rules affect small businesses. Four are classified as significant. 2020’s totals were 668 rules affecting small businesses, 26 of them significant.

Highlights from last week’s new regulations:

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

In the News: Hawley’s Antitrust Bill

A Fox News writeup of Sen. Josh Hawley’s newest antitrust bill quotes my colleague Jessica Melugin and me:

“[H]is claims that the industry, ‘hasn’t been a success … for the American economy,’ don’t ring true for so many Americans that are employed by or invested in these economic powerhouses, not to mention the millions of consumers who enjoy tech products,” Jessica Melugin, the director of the Competitive Enterprise Institute’s (CEI) Center for Technology and Innovation, said of Hawley’s merger-banning legislation. 

CEI Senior Fellow Ryan Young called Hawley’s broader anti-tech efforts “feel-good populism” that is “just another culture war issue.”

Read the whole thing here.

This Week in Ridiculous Regulations

Congress played a round of good idea-bad idea last week. Rep. Bob Good (R-VA) introduced a bill for a regulatory budget, similar to the spending budget Congress is supposed to authorize each year, while Sen. Josh Hawley (R-MO) introduced antitrust legislation to overturn the notion of innocent until proven guilty for companies he doesn’t like. The 2021 Federal Register surpassed 20,000 pages, and is on pace for just more than 70,000 pages. Meanwhile, agencies issued new rules ranging from helicopters to bankruptcy.

On to the data:

  • Agencies issued 22 final regulations last week, after 52 the previous week.
  • That is the equivalent of a new regulation every seven hours and 38 minutes.
  • With 905 final regulations so far in 2021, agencies are on pace to issue 3,142 final regulations this year. 2020’s total was 3,327 final regulations.
  • Agencies issued 39 proposed regulations in the Federal Register last week, after 29 the previous week.
  • With 640 proposed regulations so far in 2021, agencies are on pace to issue 2,222 proposed regulations this year. 2020’s total was 2,021 proposed regulations.
  • Agencies published 350 notices last week, after 309 notices the previous week.
  • With 6,245 notices so far in 2021, agencies are on pace to issue 21,684 notices this year. 2020’s total was 22,480.
  • Last week, 1,122 new pages were added to the Federal Register in a three-day week, after 1,205 pages the previous week.
  • The average Federal Register issue this year contains 281 pages.
  • With 20,248 pages so far, the 2021 Federal Register is on pace for 70,306 pages in 2021. The 2020 total was 87,352 pages. The all-time record adjusted page count (subtracting skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. There are two such rules so far in 2021, none from last week. Agencies published five economically significant rules in 2020 and four in 2019.
  • The running cost tally for 2021’s economically significant rules ranges from net savings of $100.7 million to net costs of $362.5 million. The 2020 figure ranges from net savings of between $2.04 billion and $5.69 billion, mostly from estimated savings on federal spending. The exact numbers depend on discount rates and other assumptions.
  • Agencies have published 14 final rules meeting the broader definition of “significant” in 2020, with one in the past week. This is on pace for 49 significant rules in 2021. 2020’s total was 79 significant final rules.
  • In 2021, 173 new rules affect small businesses. Four are classified as significant. 2020’s totals were 668 rules affecting small businesses, 26 of them significant.

Highlights from last week’s new regulations:

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

Seat-Jockeying and the Separation of Powers

An item from today’s Politico Playbook newsletter highlights an important aspect of Washington culture: the importance of proximity to power.

PELOSI’S LATEST HEADACHE — “Lawmakers scramble for ‘musical chairs’ to view Biden’s first Capitol speech,” by Mel Zanona and Sarah Ferris: “Which is a hotter ticket: Beyonce’s first post-pandemic concert or President Joe Biden’s first address to Congress? Washington is about to find out. Even as life slowly returns to normal on Capitol Hill amid the shrinking threat of Covid, strict safety protocols will remain in place for Biden’s April 28 joint address inside the House chamber. That means only 200 lawmakers, administration officials and staff will likely be allowed to attend the distanced and heavily sanitized event, a far cry from the typical crowds for a prime-time presidential speech.

“Such tight limits mean Democrats are already jockeying to score one of the precious few seats. And a handful of lawmakers have already logged a request with party leaders, who have the unenviable task of divvying up the small passel of tickets for the president’s debut speech.”

“Jockeying” is one word for it. We’re told the situation surrounding Biden’s speech is already downright contentious. One Democratic source told us that some in leadership didn’t even want to have this address because they knew it would cause this very problem with their members. People will feel jilted if they don’t get an invite. And Speaker NANCY PELOSI can’t afford that now because her majority is so narrow. But Biden wanted it, and the president gets what he wants.

This is not to pick on Democrats. Republicans are even worse.

Their power-worship problem got so bad, they opted against having a specific party platform for the first time since the GOP’s founding before the Civil War. Instead they pledged to support any policies then-President Trump put forward. They also went along with Trump’s attempt to change the 2020 election results, culminating in the violence at the Capitol on January 6. Even now, officials view trips to Mar-a-Lago as almost pilgrimages and are afraid to upset him.

I’ve been arguing since the Bush 43 years that the executive branch has grown too powerful. The previous administration’s excesses should have been enough to teach a lesson to both parties a lesson about the separation of powers. While the Democratic seat-jockeying episode is minor compared to the past year’s other debasements, it does not inspire hope.

Hawley Antitrust Plan Would Limit Innovation and Harm Consumers

This news release was originally posted at cei.org.

Senator Josh Hawley (R-MO) today touted a new proposal he calls a “trust busting plan” that calls for a new standard for antitrust intervention to replace the legal principle of consumer harm. While the plan is not accompanied by specific legislation, Competitive Enterprise Institute experts weighed in on the Senator’s proposal.

Director of CEI’s Center for Technology and Innovation Jessica Melugin said:

“Senator Hawley claims that allowing the tech industry to operate in a relatively free market ‘hasn’t been a success for the American consumer,’ but if there’s consumer harm to point to, why does he advocate for abandoning the consumer harm standard in U.S. antitrust law? Perhaps it’s because consumers have enjoyed consistent innovations in products and services from ‘big tech,’ especially while quarantining during the pandemic and often at no monetary cost to them.  Similarly, his claims that the industry, ‘hasn’t been a success…for the American economy,’ don’t ring true for so many Americans that are employed by or invested in these economic powerhouses, not to mention the millions of consumers who enjoy tech products.”

Senior Fellow Ryan Young said:

“One of the most problematic parts of Sen. Hawley’s antitrust plan is its proposed ban of mergers and acquisitions for companies larger than $100 billion in annual revenues. Startups need capital to compete in the big leagues. But financial regulations, especially in the post-Dodd-Frank era, make it difficult for smaller companies to hold IPOs or attract other forms of investment. So, they instead get their capital by being bought out by one of the big tech companies.

“The regulatory situation is so bad that many promising startups are founded with the explicit goal of selling out to a bigger company. If Sen. Hawley wants fewer acquisitions by big companies, he should focus on the root cause of bad financial regulations, rather than the feel-good populism of banning mergers and acquisitions.

“Then again, the feel-good populism is likely the point. Hawley’s proposal is unlikely to become law. For him, antitrust policy is just another culture war issue. He wants to fire up his base and provoke his opponents. In this sense, his antitrust proposal is no different than his similarly unserious proposals to ban infinite scrolling in social media apps and to have the federal government regulate political speech.”

For more information on CEI’s position on antitrust, please visit cei.org/antitrust.

This Week in Ridiculous Regulations

Treasury Secretary Janet Yellen floated the idea of a global minimum corporate tax and Amazon workers in Alabama voted against unionizing. The Biden administration on Friday released a $1.52 trillion spending proposal, separate from the $2 trillion infrastructure bill that is still under construction. Meanwhile, agencies issued new rules ranging from subsistence fishing to robocalls.

On to the data:

  • Agencies issued 52 final regulations last week, after 48 the previous week.
  • That’s the equivalent of a new regulation every three hours and 14 minutes.
  • With 876 final regulations so far in 2021, agencies are on pace to issue 3,269 final regulations this year. 2020’s total was 3,327 final regulations.
  • Agencies issued 29 proposed regulations in the Federal Register last week, after 62 the previous week.
  • With 591 proposed regulations so far in 2021, agencies are on pace to issue 2,205 proposed regulations this year. 2020’s total was 2,021 proposed regulations.
  • Agencies published 309 notices last week, after 422 notices the previous week.
  • With 5,738 notices so far in 2021, agencies are on pace to issue 21,657 notices this year. 2020’s total was 22,480.
  • Last week, 1,205 new pages were added to the Federal Register in a three-day week, after 984 pages the previous week.
  • The average Federal Register issue this year contains 282 pages.
  • With 18,881 pages so far, the 2021 Federal Register is on pace for 70,451 pages in 2021. The 2020 total was 87,352 pages. The all-time record adjusted page count (subtracting skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. There are two such rules so far in 2021, none from the last week. Agencies published five economically significant rules in 2020, and four in 2019.
  • The running cost tally for 2021’s economically significant rules ranges from net savings of $100.7 million to net costs of $362.5 million. The 2020 figure ranges from net savings of between $2.04 billion and $5.69 billion, mostly from estimated savings on federal spending. The exact numbers depend on discount rates and other assumptions.
  • Agencies have published 14 final rules meeting the broader definition of “significant” in 2020, with one in the last week. This is on pace for 52 significant rules in 2021. 2020’s total was 79 significant final rules.
  • In 2021, 163 new rules affect small businesses. Four are classified as significant. 2020’s totals were 668 rules affecting small businesses, 26 of them significant.

Highlights from last week’s new regulations:

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

More on the Corporate Tax

Andrew Stuttaford, who edits National Review‘s policy-focused Capital Matters section, has a writeup in his daily newsletter on the consequences of a corporate tax increase, in which he quotes from my recent piece that ran on his site. Andrew’s analysis is excellent, and detailed.

The Washington Examiner‘s Sarah Westwood quotes me in an article about the proposed increase.

The Dispatch, an outlet founded by Jonah Goldberg to offer a less tribal voice for the right than the Trump-centered outlets, was also nice enough to draw from my National Review piece in their daily newsletter (scroll down to the “worth your time” section”.

I also discussed corporate taxes on the Rod Arquette show in Salt Lake City. I’ll post a link to the audio if I find one.

Who Pays Corporate Taxes?

Congress is considering increasing the corporate tax rate from 21 percent to 28 percent to help pay for the big infrastructure bill it is currently assembling. Over at National Review, I point out that corporations don’t actually pay corporate tax. You and I do:

That is because companies pass on their costs. Some of the tax is paid by consumers, who pay higher prices. Company employees pay some of the tax through lower wages. And investors’ retirement accounts pay some of the tax through lower returns.

There is also an often overlooked rent-seeking story behind Treasury Secretary Janet Yellen’s proposal for a global minimum corporate tax rate:

It is not difficult to imagine a U.S. company lobbying heavily to raise its rivals’ taxes in lower-tax countries. This would make the U.S. company more competitive, but in strictly relative terms. Such a lobbying win could aid a company without it having to do the hard work of improving its products or offering consumers better deals.

At the same time, though, foreign companies could lobby to raise U.S. corporate-tax rates for similar reasons. Why bother improving your own company when you can just hurt your rivals instead? That is the real race to the bottom.

A global minimum corporate tax rate turns out to be a form of hidden trade protectionism.

Read the whole thing here.

This Week in Ridiculous Regulations

Washington’s attention flitted back and forth between beginning work on a multi-trillion-dollar infrastructure bill and a brewing sex scandal allegedly involving Rep. Matt Gaetz and a 17-year-old girl. Meanwhile, agencies issued new rules ranging from shrimp trawlers to the Community Forest Program.

On to the data:

  • Agencies issued 48 final regulations last week, after 49 the previous week.
  • That’s the equivalent of a new regulation every three hours and 30 minutes.
  • With 808 final regulations so far in 2021, agencies are on pace to issue 3,258 final regulations this year. 2020’s total was 3,327 final regulations.
  • Agencies issued 62 proposed regulations in the Federal Register last week, after 50 the previous week.
  • With 553 proposed regulations so far in 2021, agencies are on pace to issue 2,230 proposed regulations this year. 2020’s total was 2,021 proposed regulations.
  • Agencies published 422 notices last week, after 328 notices the previous week.
  • With 5,429 notices so far in 2021, agencies are on pace to issue 21,891 notices this year. 2020’s total was 22,480.
  • Last week, 984 new pages were added to the Federal Register in a three-day week, after 883 pages the previous week.
  • The average Federal Register issue this year contains 282 pages.
  • With 17,492 pages so far, the 2021 Federal Register is on pace for 70,532 pages in 2021. The 2020 total was 87,352 pages. The all-time record adjusted page count (subtracting skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. There are two such rules so far in 2021, none from the last week. Agencies published five economically significant rules in 2020, and four in 2019.
  • The running cost tally for 2021’s economically significant rules ranges from net savings of $100.7 million to net costs of $362.5 million. The 2020 figure ranges from net savings of between $2.04 billion and $5.69 billion, mostly from estimated savings on federal spending. The exact numbers depend on discount rates and other assumptions.
  • Agencies have published 13 final rules meeting the broader definition of “significant” in 2020, with one in the last week. This is on pace for 52 significant rules in 2021. 2020’s total was 79 significant final rules.
  • In 2021, 142 new rules affect small businesses. Three are classified as significant. 2020’s totals were 668 rules affecting small businesses, 26 of them significant.

Highlights from last week’s new regulations:

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

U.S. Trade Representative Tai Should Rethink Keeping China Tariffs in Place

Over the weekend, The Wall Street Journal interviewed Katherine Tai, the new United States Trade Representative. She has a lot of work ahead of her to undo the damage from the Trump administration’s protectionist turn. But she made two disappointing remarks about the approach she plans to take on the tariffs Trump placed on Chinese goods worth $377 billion per year. These can be undone at any time by either Congress or the stroke of President Biden’s pen.

First, as she told the Journal:

“I have heard people say, ‘Please just take these tariffs off,’” Ms. Tai said. But “yanking off tariffs,” she warned, could harm the economy unless the change is “communicated in a way so that the actors in the economy can make adjustments.”

The top trade policy priority right now should be to prevent normalizing President Trump’s trade policies. He doubled U.S. tariffs in one term, in unpredictable fashion. That was the radical change that made planning difficult. Restoring tariffs to where they already were for a long time would be far better for giving businesses something to plan around.

Tai has this argument backwards, and with poor timing. Businesses are struggling to recover from the COVID slowdown. Lowering tariffs would provide an economic stimulus that requires no new spending. Economics aside, the politics of undoing Trump’s China tariff are also positive. It sends a message of moving on, and a responsiveness to consumers, businesses, and economic realities.

Her second disappointing remark is about leverage:

The negotiator also cited tactical reasons for her reluctance.

“No negotiator walks away from leverage, right?” she said.

Tariffs do not give the U.S. any leverage, so there is none to walk away from by repealing them. Their purpose was to get China to reform its unfair trade policies, which is the right goal, but tariffs never had a chance of achieving it. The first round sparked no reforms, only retaliation. Trump enacted a second round and got the same result. On it went, and now three quarters of China’s exports to America are tariffed, there are retaliatory tariffs on the same proportion of American exports to China, and Beijing has not made a single notable reform.

True, withdrawing tariffs would also fail to convince China to reform, but that does not justify keeping them or trying to use them as leverage. Tariffs simply do not work with Beijing as a negotiating tactic. They are like trying to use a hammer as scissors. They are the wrong tool for the job. When a strategy fails, the right thing to do is admit it and try something else.

There is a lot the U.S. can do to help along Chinese reform. We now know tariffs are not part of the list. There is also no silver bullet. Pundits and voters hate hearing this, but it’s true. Pretending that there is a silver bullet in order to appeal to them will do no good. Change in China must ultimately come from within, but there is still a lot the U.S. can do to help. It takes a multifaceted strategy that is more subtle than tariffs, and gets less media coverage than summits or negotiations.

Continued economic, intellectual, and cultural engagement with China will let ordinary Chinese people see how much richer and freer liberal policies are. Walls don’t work, but bridges, windows, and conversations do. This is a slow, bottom-up process that is difficult to measure with statistics.

But just as blue jeans, underground rock music, and American movies helped to win the Cold War, today’s equivalents can help ordinary Chinese people see the connection between liberalism, markets, and prosperity—and work toward moving their own country in that direction.

That is a long-term process, but there is important work right now that Tai, President Biden, and Congress can do to help get it started. First on the agenda should be getting rid of the Trump tariffs. Neither Tai’s “companies will have problems adjusting” argument nor her leverage argument hold water. The right thing to do is to rip off the Trump-era band-aid and move on to policies that at least have a chance of working. Congress or President Biden could do this tomorrow.

Repealing these bad policies is not enough, though. The larger system that makes tariff abuse possible needs reform. As we recommend in the new CEI Agenda for Congress, this would mean repealing Section 232 of the Trade Expansion Act of 1962 and Sections 201 and 301 of the Trade Act of 1974.

These provisions allow the president to enact tariffs without congressional approval. The China tariffs were enacted under Section 301. The steel and aluminum tariffs—against allies we’ll need as counterweights to China—were enacted under Section 232, allegedly for national security reasons. It’s time for them to go, and Tai can play a role in making that happen.

The Trans-Pacific Partnership is an important diplomatic counterweight to China; the U.S. should rejoin it. Tai and President Biden should work to rebuild the World Trade Organization’s dispute resolution process, where the U.S. wins more than 85 percent of the cases it brings. Renewing Trade Promotion Authority (TPA) would speed up negotiations for a trade agreement with China, if the president chooses that route. At the very least, TPA would help with upcoming agreements with the United Kingdom and the European Union, whose help we’ll need to counter Chinese influence. Tai can play an important role working with Congress to renew TPA before it expires in July.

This is a somewhat slow period in China-U.S. relations. The tariff back-and-forth is likely over with Trump out of office. The Phase One agreement, which was unrealistic to begin with, was made completely unworkable by COVID, and is essentially dead.

But over the medium to long term, working to liberalize China will be a top economic, diplomatic, and humanitarian priority for the United States. Tai stumbled out of the gates in her first interview, but it’s a long race. With the right policies, she can help make historic positive changes that will benefit both the American and Chinese people.

For more on those policies, see the trade chapter in CEI’s new Agenda for Congress, my paper on COVID-related trade reforms, and Iain Murray’s and my paper “Traders of the Lost Ark.”