May 11, 2006

Moderating Regulatory Growth: An Analysis of the U.S. Budget for Fiscal Years 2006 and 2007

  • Susan Dudley

    Director, George Washington University Regulatory Studies Center
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The Report

  • A new report of the Mercatus Center at George Mason University and the Murray Weidenbaum Center on the Economy, Government, and Public Policy at Washington University in St. Louis reveals a slight decrease in regulatory spending, after adjusting for inflation.
  • The 28th annual Regulators' Budget report, Moderating Regulatory Growth: An Analysis of the U.S. Budget for Fiscal Years 2006 and 2007, examines the Budget of the U.S. Government to track the expenditures and staffing of federal regulatory agencies between 1960 and 2007.

Our Findings

  • The FY 2007 Budget of the United States Government calls for expenditures on regulatory activities of $44.2 billion.
  • The requested budget for writing, administering, and enforcing federal regulations in FY 2007 is nominally larger than the estimated budget of $44.0 billion in fiscal year 2006, but actually reflects a 1.4 percent decline (in real, inflation-adjusted terms).
  • The requested level of staffing on regulatory activities in fiscal year 2007 is 245,361 full-time equivalent people, or 4,332 (1.8 percent) more employees than in fiscal year 2006.
  • Consistent with the President's stated "highest priority: protecting our citizens and our homeland," the 2007 Budget requests the largest dollar and staff increases for regulatory components of the Department of Homeland Security.
  • To date, appropriated budget outlays for the current fiscal year (2006) are 10.1 percent greater in real terms than in fiscal year 2005, largely due to larger than requested appropriations related to homeland security, transportation, and environmental regulation.
  • Despite the spending restraint evident in the 2007 budget request, regulatory expenditures and staffing are 44.1 percent larger in 2007 than they were in 2000-an increase in real spending on regulatory activities of $12.5 billion between 2000 and 2007.
  • Driven largely by homeland security activities, staffing levels in 2007 are 40 percent larger than they were in 2000.

Conclusions

  • The full impact of regulations on American businesses, workers, and consumers is difficult to measure directly.
  • The expenditures of federal regulatory agencies, as tracked in this report, and the trends in that regulatory spending over time, provide an indirect measure of the size and growth in regulations with which American businesses, workers, and consumers must comply.
  • This information serves as a barometer of regulatory activity, providing policy makers and others with useful insights into the composition and evolution of regulation.