May 4, 2016
Nine Years of Anti-Regulatory Fiction
Statement of Amit Narang, Regulatory Policy Advocate for Public Citizen’s Congress Watch Division
Note: On Tuesday, the Competitive Enterprise Institute (CEI) for the ninth time released a previously discredited report on the costs of federal regulations.
The Competitive Enterprise Institute’s discredited report on federal regulations belongs in the fantasy section of the bookstore, next to “Star Wars” and “Game of Thrones.” When asked about its nearly identical report in 2015, CEI admitted that it used “back of the envelope” calculations and that no one should assume households actually pay anything in regulatory costs.
In addition to the numerous and serious methodological flaws in the report, it wholly ignores the benefits that regulations provide to the public. CEI admits it made no attempt to compute the benefits of the regulations it scrutinized or compare those benefits to costs. This is akin to grocery shoppers deciding to buy no groceries because they cost money. Deceiving the public, the press and lawmakers by hiding regulatory benefits is unacceptable.
The report is full of fictitious figures that cannot withstand even the most basic scrutiny. For example, the total cost figure in CEI’s report includes more than $300 billion in transfer payments totally unrelated to regulatory costs, such as Medicare benefits. Another $316 billion of the cost figure is made up of tax compliance costs, which also have nothing to do with any sensible tally of regulatory costs.
In claiming that “economic” regulations cost roughly $400 billion per year, CEI’s report relies on a notorious report on the impact of federal regulations commissioned by the U.S. Small Business Administration (SBA). That SBA report has been thoroughly debunked by independent experts and received so much criticism that the SBA eventually disavowed it.
CEI should disavow this report instead of republishing it year after year.