With the ink finally drying on more than 79,000 pages of regulation in 2014, many Americans might wonder what President Obama’s “pen and phone” will cost them. The answer is $567 for every person living in the United States. In 2014, the government somehow managed to publish $726 million in regulatory costs every day it was open, a pace that generated more than $181 billion in total burdens.
The main culprit for these incredible burdens is a usual suspect for those following the regulatory state: the Environmental Protection Agency (EPA). The agency published arguably two of the most contentious rulemakings of the year: greenhouse-gas standards for existing power plants and new ozone (smog) standards. The greenhouse-gas standards promise to increase national average electricity prices between 5.9 and 6.5 percent by 2020, and that’s according to EPA’s math. Considering two previous EPA rules that will also drive up electricity prices (Utility MACT and CSAPR), consumers could face a 10 percent electricity price hike thanks to EPA.
The other driver of regulatory growth last year is perhaps a bit more unheralded. The Department of Energy (DOE) actually outgained EPA in net present value costs by a margin of $67.5 billion to $61.4 billion, including deregulatory measures. EPA actually had five rulemakings that cut costs, compared to zero for DOE.
Here, Americans: Earn Less, Pay More
DOE’s regulatory agenda will also go after Americans’ paychecks. Every one of its energy efficiency regulations will increase the purchase price of various consumer goods. Its rule for residential dishwashers will add almost $100 to the cost of a standard unit, not to mention the $413 million in annual burdens. Americans interested in purchasing a new air conditioner or heat pump will be greeted with price increases of $17 to $23. Although under the radar, DOE’s regulatory actions pack just as much of a punch on manufacturers and consumers as any other agency.
For those worried about food prices, don’t worry. Regulators have you covered there as well. Late in 2014, regulators at the Food and Drug Administration (FDA) implemented new calorie labeling requirements for vending machines and virtually every establishment that serves food. One of the last main planks of Obamacare, these $1.6 billion rules are guaranteed to raise prices. Just ask the FDA: “We fully expect that some proportion of the costs imposed by the regulation will be passed on to consumers.” It’s rare to get an honest accounting of costs and benefits from regulators, much less a promise of higher prices in return for calorie information that is already readily available.
Do You Live In the Most-Affected States?
If there is a silver lining to these huge numbers, it’s that regulators often explicitly list which industries these new dictates will affect. Using Census data on the geographic distribution of industries nationwide, we can apportion regulatory costs to get a sense of which states bear the greatest burden.
The top three are California, Texas, and Ohio. At $3.4 billion, Ohioans must feel like they are under a constant barrage of bad regulatory news. From two rounds of major fracking rules to three significant power plant regulations, industries in the state have shed jobs as a result.
Since 2008, Ohio has lost 1,088 power plant jobs, cutting industry employment in the state by a fifth. Because of EPA’s new greenhouse-gas standards, two more power plants could close and roughly 100 additional employees could lose their jobs. This is hardly atypical across the country. Data for Kentucky, West Virginia, and Pennsylvania look eerily similar. This should surprise few given the breadth of new regulations and the promise of more in the future.
Sadly, we could be in the same situation next year. The Obama administration proposed more than $102 billion in new rules in 2014, which likely portends yet another year of action in 2015. EPA has already promised final greenhouse gas rules by the summer and tighter efficiency standards for the transportation sector. Consumers, get your wallets ready and hope that the courts and Congress rush to the rescue.
