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Obama’s Regulatory Rampage

Fasten your seatbelts, because the courts and Congress won’t be able to slow it down much

Jan 28, 2013, Vol. 18, No. 19 • By ADAM J. WHITE
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Despite all of the White House speechwriters’ labors on the Inaugural and State of the Union Addresses, their attempt to define the tone of the president’s second term is unlikely to improve upon the president’s own words, a year ago: “Where Congress is not willing to act, we’re going to go ahead and do it ourselves.” It would be “nice” to work with Congress, he conceded, but he and his regulators were ready to act unilaterally. 

Obama and his red tape

Jason Seiler

That threat echoed the White House press secretary’s own warning, just weeks earlier, that although Congress ought to act to improve the economy, the president “can also act independently—or, rather, administratively, and exercise his executive authority to benefit the American people in other ways. And he will continue to do that.” The White House called this the “We Can’t Wait” initiative. 

Today, looking ahead at Barack Obama’s second term, many of his supporters still can’t wait. The New Republic’s Timothy Noah is among them. “With the election over,” he wrote last month, “the president can now take bolder action on a host of issues that don’t require cooperation—or even input—from Congress.” True, “some of these actions might be controversial,” but “that concern matters less now that Obama has faced voters for the last time.”

Noah needn’t fret. In his second term, the president will have every incentive to pursue an agenda predominantly, perhaps even exclusively, through unilateral executive branch action. Some call this the “regulatory cliff”; others, a regulatory “flood” or “tsunami” (as Sen. Rob Portman, the Wall Street Journal, and the Chamber of Commerce have put it). Call it what you will, but for the next four years, the Obama administration will govern primarily through the regulatory agencies. And Congress and the courts, having tied their own hands, can do little to stop it.

 

Before speculating what the president will do in his second term, consider briefly what he accomplished in his first. While Obama’s first four years were headlined by landmark legislation, such as the Affordable Care Act and the Dodd-Frank financial reforms, his administration’s agencies also imposed immense regulatory burdens.

According to the White House—specifically, the Office of Information and Regulatory Affairs (OIRA), the White House’s central office for regulatory analysis—the “major rules” enacted by executive branch agencies in President Obama’s first three years cost the public as much as $32.1 billion. 

Now, the White House offered that figure as cause for celebration, claiming the alleged net benefits of those regulations were (by its own accounting) worth $91 billion—or, as the White House’s website boasts, “over 25 times the net benefits” of the Bush administration’s first three years. But one need not be a cynic to have doubts about the administration’s accounting. The first three years of Obama’s regulations weren’t just 25 times more “beneficial” than Bush’s; they were also 6 times more “beneficial” than Clinton’s first three years of regulations. The administration was evidently very, very confident of its own ability to regulate the nation into prosperity.

Still, even taking the administration’s analysis at face value, President Obama’s first term reflects a marked increase in regulatory burden: The Obama administration’s first three years of major rules, costing up to $26.7 billion, were five times more burdensome than the Bush administration’s first three years ($5.3 billion) and three and a half times more burdensome than the Clinton administration’s ($7.6 billion).

And that analysis is limited to just the administration’s “major rules”—rules costing more than $100 million annually—for which the agencies calculated costs and benefits. It neglects 41 other “major rules” for which benefits and costs had not been calculated, and is only “a fraction of the 317 significant regulations, and over 3,500 total regulations,” promulgated by the administration, according to Susan Dudley, director of George Washington University’s Regulatory Studies Center and former OIRA administrator under President George W. Bush.

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