This Week in Ridiculous Regulations

Thursday’s Federal Register was not published online until late in the evening due to a technical error. Friday’s edition did not appear until the afternoon. Both editions are more than 1,000 pages each; an average day is under 300 pages. The 2020 Federal Register passed 25,000 pages, and is poised to surpass last year’s page count by more than 1,000 pages. The number of final regulations in 2020 also passed the 1,000 barrier. Meanwhile, regulatory agencies issued new final regulations ranging from fuel economy to seasonal workers.

On to the data:

  • Last week, 48 new final regulations were published in the Federal Register, after 55 the previous week.
  • That’s the equivalent of a new regulation every three hours and 30 minutes.
  • Federal agencies have issued 1,036 final regulations in 2020. At that pace, there will be 3,048 new final regulations. Last year’s total was 3,150 regulations.
  • There were also 49 proposed regulations in the Federal Register last week, for a total of 733 on the year. At that pace, there will be 2,156 new proposed regulations in 2020. Last year’s total was 2,184 proposed regulations.
  • Last week, agencies published 425 notices, for a total of 7,414 in 2020. At that pace, there will be 21,806 new notices this year. Last year’s total was 21,804.
  • Last week, 3,112 new pages were added to the Federal Register, after 1,464 pages the previous week.
  • The 2020 Federal Register totals 26,318 pages. It is on pace for 77,405 pages. The 2019 total was 76,288 pages. The all-time record adjusted page count (which subtracts 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. Three such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $1.38 billion and $4.19 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 24 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 202 new rules affect small businesses; nine of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them significant.

Highlights from last week’s new final regulations:

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

This Week in Ridiculous Regulations

New unemployment applications were down to 4.4 million last week. This is still more than an order of magnitude greater than the pre-coronavirus record. With roughly 26 million people now claiming benefits, the unemployment rate is likely now at Great Depression-era levels. Meanwhile, regulatory agencies issued new final regulations ranging light-duty vehicles to golden parakeets.

On to the data:

  • Last week, 55 new final regulations were published in the Federal Register, after 49 the previous week.
  • That’s the equivalent of a new regulation every three hours and three minutes.
  • Federal agencies have issued 988 final regulations in 2020. At that pace, there will be 3,088 new final regulations. Last year’s total was 3,150 regulations.
  • There were also 39 proposed regulations in the Federal Register last week, for a total of 684 on the year. At that pace, there will be 2,138 new proposed regulations in 2020. Last year’s total was 2,184 proposed regulations.
  • Last week, agencies published 462 notices, for a total of 6,989 in 2020. At that pace, there will be 21,841 new notices this year. Last year’s total was 21,804.
  • Last week, 1,464 new pages were added to the Federal Register, after 1,352 pages the previous week.
  • The 2020 Federal Register totals 23,204 pages. It is on pace for 72,513 pages. The 2019 total was 76,288 pages. The all-time record adjusted page count (which subtracts 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. Two such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $180 million and $4.69 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 20 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 195 new rules affect small businesses; eight of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them significant.

Highlights from last week’s new final regulations:

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

Retro Review: Vlad Tarko on Elinor Ostrom

My review of Vlad Tarko’s excellent intellectual biography of Elinor Ostrom is up at cei.org. Ostrom was the first woman to win the economics Nobel. In addition to popularizing the concept of polycentric governance, she, along with her husband Vincent Ostrom, co-founded the Workshop at Indiana University, which continues to produce high-quality multidisciplinary scholarship.

Trump Defers Tariff Payments for Struggling Businesses: A Good Start, More Needed

President Trump has deferred selected tariff payments for companies experiencing coronavirus-related hardship. U.S. Customs issued a press release here and the temporary final rule appeared in the April 22 Federal Register. It came after more than two weeks of starts, stops, denials, reversals, and at least one accusation of “fake news” from the president. This indicates that trade policy is still an area of uncertainty and not something rebuilding businesses can plan around—potentially endangering post-virus economic recovery.

The deferrals are better than nothing. But it is important not to oversell them. Here is a bit of context on the impact they are likely to have:

  • They are deferrals, not exemptions. U.S. producers will still pay all affected tariff duties, just 90 days later. Because of this, companies have no reason to reduce prices for consumers.
  • The deferrals are only for imports made in March and April—precisely when imports significantly slowed. That limits their usefulness in buying time for cash-strapped businesses.
  • None of the Trump tariffs from 2017 onwards are eligible for deferrals. Since Trump has roughly doubled tariffs, this means about half of all tariffs are not eligible for deferred payment. That includes the steel and aluminum tariffs, the China tariffs, and other recent measures against the European Union, Turkey, and India.
  • Antidumping and countervailing duties are also ineligible for deferred payments. These are the most common type of trade barrier, further limiting the deferrals’ impact.
  • Companies must be experiencing “significant financial hardship” to be eligible This means a company must have lost at least 60 percent of its sales since this time in 2019.

The Cato Institute’s Dan Ikenson estimates the deferrals will total about $6 billion. That is certainly enough to buy some time for some struggling businesses. For context, total customs duties in 2019 were $85 billion. Total U.S. imports were $3.43 trillion (in chained 2012 dollars; $3.77 trillion in 2019 dollars). The most newsworthy part of these deferrals might be how newsworthy they aren’t.

The administration and Congress could do much better. A more wide-ranging trade relief measure ewould include Trump’s newly enacted tariffs. It could even do away with them entirely.

Considering the hemming, hawing, and uncertainty that surrounded even this small deferral, Congress should give businesses some stability to plan around by taking back the tariff-making authority it delegated away to the president in the 1960s and 1970s. This would prevent further increases while insuring against ad hoc multibillion-dollar policy changes with little or no notice.

While better than nothing, this deferral is far less than what needs to be done to allow businesses to rebuild, save consumers money, and for supply networks to get medical equipment where it is most needed.

That said, the deferral has a subtle hidden benefit. It marks at least the second time the Trump administration has tacitly admitted that Americans, not foreign exporters, pay tariffs. The first admission happened last August when adviser Peter Navarro called a delay in upcoming new China tariffs “President Trump’s Christmas present to the nation.” More such presents would help protect public health right now while helping with economic rebuilding when the pandemic passes.

On the Radio: #NeverNeeded Regulations

At 7:15 ET today, I’ll appear on the Lars Larson Show to talk about #NeverNeeded regulations.

Congress Has Already Introduced Bills to Reform #NeverNeeded Regulations

Policy makers have already waived more than 350 regulations and counting that were slowing the pandemic response and harming economic recovery. But with a 185,000-page Code of Federal Regulations and plenty more rules at the state and local levels, there is more to do. Fortunately, a number of bills have already been introduced in Congress that could help get rid of more #NeverNeeded regulations.

CEI’s Agenda for Congress has more reform ideas, though not all of them are applicable to the #NeverNeeded effort. For a guide on identifying #NeverNeeded regulations, see our handy infographic. We also a have a short paper full of reform ideas and the neverneeded.cei.org website. And of course, the #NeverNeeded social media hashtag is a continuing source of new ideas.

Fixing the Regulatory Process

Regulations from the Executive in Need of Scrutiny (REINS) Act (S. 92) 

This bill would require Congress to vote on new regulations costing more than $100 million per year. The Senate version is sponsored by Rand Paul (R-KY), Chuck Grassley (R-IA), Joni Ernst (R-IA), Todd Young (R-IN), and Ted Cruz (R-TX). Rep. Jim Sensenbrenner (R-WI) sponsors the House version. The REINS Act is a separation of powers bill intended to make sure agencies don’t go rogue and pass major rules Congress never authorized through legislation.

While the REINS Act would affect fewer than 50 rules in an average year out of more than 3,000, it would add stability to an uncertain regulatory climate. Agencies would have to stay within the bounds Congress has legislated for them, and would not be able to pass hasty “flash policy” that could hurt the virus response and economic recovery. For more, see my paper on the REINS Act.

Guidance Out Of Darkness (GOOD) Act (S.380)

Agencies are required to put new regulations through a notice-and-comment rulemaking process. This allows the public to see and contribute to draft versions of regulations before they become final. But agencies routinely avoid this transparency and accountability by enacting regulation through other means such as guidance documents, memoranda, or even press releases and blog posts. CEI’s Wayne Crews calls these extralegal rules “regulatory dark matter.” Courts routinely defer to dark matter in cases, meaning it has de facto force of law.

President Trump issued an Executive Order last year requiring agencies to make all of their guidance documents public. This is an excellent start, but the problem with Executive Orders is that the next president can undo them on a whim. Dark matter reform needs the permanence that comes with congressional legislation. The GOOD Act, sponsored by Sen. Ron Johnson (R-WI) and Rep. Mark Walker (R-NC), would increase agency transparency and accountability. It would also add stability to the regulatory environment that recovering businesses can plan around during a chaotic time. Wayne Crews has more on regulatory dark matter here.

Jones Act Repeal

Open America’s Waters Act of 2019 (S. 694) 

The Jones Act costs the economy somewhere between $656 million to $9.8 billion per year. The Open America’s Waters Act, sponsored by Sen. Mike Lee (R-UT), would repeal it entirely. The Jones Act is a shipping law from 1920 that is essentially a Buy American law for moving goods between U.S. ports. Incumbent shipping companies love the Jones Act for obvious reasons—it keeps competition out. But because of the Jones Act, shipping between U.S. ports is slow and expensive.

There is little incentive to innovate or save costs, and the ships are aged and small, since there is little need to invest in fleet improvements in a government-protected cartel. This contrasts sharply with international shipping, where the Jones Act does not apply. When competition is allowed, shipping is cheaper, faster, more reliable, and more competitive.

An effective coronavirus response needs medical supply networks to be fast, flexible, and affordable. Improved shipping will also aid in the coming economic recovery. The Jones Act has long been obsolete. Now is the ideal time to finally get rid of it, and the Open America’s Waters Act would do just that. CEI’s Mario Loyola’s forthcoming Jones Act paper has more.

Protecting Access to American Products Act (S. `1873)

If outright repeal of the Jones Act proves not possible politically, then this bill, also sponsored by Sen. Lee, is a second-best backup plan. It would streamline the Jones Act waiver process

National Environmental Policy Aact Reform

Federal Permitting Reform and Jobs Act (S. 1976)

This bill would ease environmental permitting and other obstructions that delay infrastructure projects. It builds on previous reforms in the Fix America’s Surface Transportation Act of 2015. The Senate version is sponsored by Sen. Rob Portman (R-OH) and the House version’s bipartisan sponsors include Reps. Kelly Armstrong (R-ND), Rob Bishop (R-UT), and Collin Peterson (D-MN). Congress is clearly committed to trillions of dollars of “flash policy” such as stimulus and bailouts. Much of it will be wasteful, but reforms such as this bill will help at least a little more of that money spent on projects instead of on red tape.

This list is only a beginning. Adding to it would help public health during the COVID-19 response and with economic recovery when it is safe again. Policy makers can find plenty of ideas in CEI’s new #NeverNeeded paper, as well as our Agenda for Congress.

CEI #NeverNeeded Panel Event Now on YouTube

The link is here. The speakers include my colleagues Kent Lassman, Iain Murray, and me.

For the next several weeks, there will be new online events each Tuesday featuring CEI experts on a variety of reform areas. More information is at cei.org.