Federal regulatory spending continues to increase, says new study

Despite efforts to freeze non-security discretionary spending, the budgets of federal regulatory agencies are increasing in both 2011 and 2012.

The estimated cost of running regulatory agencies in fiscal year 2011 is $54.9 billion, a 5.7 percent increase over 2010 spending. The president’s budget request for 2012 calls for an additional 4.5 percent increase to $57.3 billion.

The on-budget cost of regulation is detailed in a new report, Fiscal Stalemate Reflected in Regulators’ Budget: An Analysis of the U.S. Budget for Fiscal Years 2011 and 2012. The annual report is published by the Weidenbaum Center on the Economy, Government and Public Policy at Washington University in St. Louis and the George Washington University Regulatory Studies Center.

Regulatory agencies with the largest requested budgets for fiscal year 2012 included:

  • the Patent and Trademark Office, reflecting President Barack Obama’s commitment to innovation;
  • the Food and Drug Administration, which is responsible for issuing regulations under the Food Safety Modernization Act;
  • the Department of Homeland Security; and
  • financial regulatory agencies, including the Securities and Exchange Commission and the Comptroller of the Currency.

This is the 33rd edition of the report tracking the spending and staffing for the regulatory agencies as documented in the president’s budget. It includes data from 1960-2012.

“The fiscal year 2012 budget request suggests a renewed interest in economic regulation, which had been declining in prominence since the 1960s,” says Susan E. Dudley, director of the George Washington University Regulatory Studies Center, research professor of public policy and public administration, and study co-author.

“The portion of the regulators budget devoted to economic regulation is 17 percent in 2012, compared to around 15 percent over the past decade,” she says.

Budgets and staffing for agencies focused on energy and environmental regulation appear to be holding steady or declining.

Regulatory activity related to two major pieces of legislation enacted last year — the Patient Protection and Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act — is not well-reflected in this study.

“We don’t yet have all the data to include those numbers in this year’s report,” says Melinda Warren, director of the Weidenbaum Center Forum and study co-author.

“We hope to be able to account for both of these significant regulatory areas in our next report in 2012,” she says.

The number of staff working to develop and enforce regulations in 2012 is expected to increase by about 10,000 people over 2011 levels to reach an all-time high of 291,676. Additional employees at the Department of Homeland Security make up more than 65 percent of the total staff increase.

The full report is available online at wc.wustl.edu and regulatorystudies.gwu.edu.

The Weidenbaum Center on the Economy, Government and Public Policy at Washington University in St. Louis supports scholarly research, public affairs programs and other activities in the fields of economics, government and public policy, serving as a bridge between scholars and policy makers.

The George Washington University Regulatory Studies Center in the Trachtenberg School of Public Policy and Public Administration raises awareness of regulations’ effects to improve regulatory policy through research, education and outreach. It is a leading source for applied scholarship on regulatory issues, and a training ground for current and future policy officials who want to understand the effects of regulation and ensure that regulatory policies are designed to make the public better off.