Report: ‘Regulatory cliff’ of new regulations could top $100 billion

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Michael Bastasch Contributor
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As Congress debates taxes and spending, a slew of rules and regulations that had been delayed by the Obama administration could potentially be released and cost more than $100 billion, according to a report.

More than 80 percent of “regulatory actions” currently under review by the Obama administration have been held over typical review time and many regulations have been held past their scheduled release dates.

“It is hard to say why this administration has been so slow to publish some rules but not others, though there is plenty to speculate,” Sam Batkins, Director of Regulatory Policy at the American Action Forum and the author of the study, told The Daily Caller News Foundation in an email.

Typically regulations are sent to the White House and reviewed for about one to two months, and current law dictates that regulations should not languish at the White House for more than 90 days. However, more than 80 percent of all regulations currently under review by the Obama administration have been there for more than 90 days.

In particular, the White House admits that 84 percent of EPA and 100 percent of new energy regulations have been delayed.

“EPA and DOE have the longest-languishing regulations likely because of cost and political implications,” said Batkins. “The White House learned from their 2011 rejection of ozone standards that cost implications can have major political ramifications.”

“Some of the notable rules currently at the White House include: Boiler MACT, which has been in an out of the courts, and standards for formaldehyde emissions.”

The EPA’s Boiler MACT rule, which aims to reduce hazardous emissions from industrial boilers and process heaters, was set to be released in April of this year and is set to cost $1.5 billion, according to the report.

A recent report by Oklahoma Republican Sen. James Inhofe said that the rule could reduce the U.S. economy by 1.2 billion dollars and destroy about 800,000 jobs.

In the pipe, is also a rule for hydraulic fracturing — fracking — on federal lands currently under review that will cost $377 million.

Also, four economically significant energy conservation proposals are in the pipe, according to AAF, but they don’t have any public information on the costs. However, the average cost of other recent conservation rules is $876 million, according to AAF.

“New standards for walk-in freezers, lamps fixtures, refrigeration equipment, and manufactured housing could cost billions of dollars,” Batkins writes in the report.

Delays in reviewing has also caused a “bottleneck” of economically significant regulations — those costing more than $100 million. Currently, there are 25 economically significant rules at the White House and nine of these have been under review since 2011. Dozens of other regulations scheduled for publication in the fall have also been held back, according to AAF.

“One plausible scenario is politics,” writs Batkins. “Many of the pending regulations are controversial, expensive to implement, and could reinforce the perception that the Administration ‘over-regulates.'”

For example, the Affordable Care Act mandated that vending machines and restaurants show nutritional information. Both are set to cost more than $1.1 billion with 1.4 million in paperwork burden hours and both rules are scheduled for release this month.

The American Action Forum also looked at past re-election years to find a trend of this sort of behavior. However, in 2004, the Bush administration reviewed 515 with an average review time of 34 days for economically significant rules. The Obama administration has reviewed 352 regulations in 2012, and the with an average review time of 72 days for economically significant rules — twice as long per rule than during Bush’s re-election and reviewing fewer regulations.

“What is most troubling, however, is the lack of transparency,” Batkins added. “This is the first year since 1996 where the White House has failed to provide the Unified Agenda of regulations, as required by law, and have provided no explanation as to why not.”

The White House has failed to publish its regulatory agenda for this year, which hampers transparency. The Obama administration has also been “coy” regarding the costs and benefits of recent regulations. According to AAF, a final version of the the White House report to congress on the costs and benefits of regulations has not been released this year. The final report is usually released in the summer.

“This only fuels more speculation as to why the White House would ‘hide the ball’ on its regulatory agenda,” writes Batkins.

“At more than $100 billion, the potential regulatory bill for the lame duck session is already significant,” Batkins continued. “There are doubtless benefits associated with these regulatory overhauls as well, but the public doesn’t have a fair opportunity to see the costs or benefits of these proposed rules.”

“The lame duck Congress must deal with the fiscal cliff; there is no reason they should also confront a $100 billion regulatory cliff,” he concluded in the report.

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