Regulator's Budget Continues To Rise: An Analysis of the U.S. Budget For Fiscal Years 2004-2005

The "Budget Message of the President" continues to articulate "three overriding national priorities: winning the war on terror, protecting the homeland, and strengthening the economy." The President’s Budget proposes to hold the growth in total discretionary spending to 3.9 percent and to reduce the growth in non-defense, non-homeland security spending to 0.5 percent, below the rate of inflation.

The Regulators’ Budget, the portion of the President’s Budget directed at administering and enforcing federal regulations, exceeds the 3.9 percent overall goal. The 2005 Budget requests outlays for regulatory activities of $39.1 billion, a 5.5 percent nominal (4.2 percent real) increase over the appropriated 2004 Budget.

The allocation of fiscal regulatory expenditures among the different departments and agencies reflects national concerns about homeland security and corporate governance. It also includes large increases in outlays at the Environmental Protection Agency, the Food and Drug Administration, and the Patent and Trademark Office.

Facts and Figures:

The Regulators’ Budget is estimated to be $39.1 billion in 2005, up from $37.1 billion in 2004.

Staffing at the federal regulatory agencies is expected to reach an all-time high of almost 242,500 in 2005. Due largely to the new federal staff engaged in airport screening at the Transportation Security Administration, this figure is over 69,000 people greater than in 2000, an increase of 40 percent.

Six regulatory agencies are expected to spend more than $100 million more on writing and enforcing regulations in 2005 than they did in 2004. These are:

• The Environmental Protection Agency, estimated to increase outlays by $667 million in 2005.
• Immigration and Customs Enforcement, and the Coast Guard, both in the Department of Homeland Security, with increases of $484 million and $297 million, respectively.
• The Securities and Exchange Commission (a $312 million increase).
• The Patent and Trademark Office (a $243 million increase)
• The Food and Drug Administration in the Department of Health and Human Services, with a $182 million increase.
• The Bureau of Alcohol, Tobacco, Firearms and Explosives in the Department of Justice, budgeted to receive an increase of $119 million.

Slated for reductions greater than $100 million in 2005 are:

• The Animal Plant Health Inspection Service of the Department of Agriculture. Its budget cut of $156 million may be partially due to the fact that some of its functions were transferred to the Department of Homeland Security.
• Customs and Border Protection, reorganized in the Department of Homeland Security. Its reduction of $521 million in 2005 comes after an increase of $1.7 billion in 2004.