Upward Trend in Regulation Continues: An Analysis of the U.S. Budget for Fiscal Years 2005 and 2006

Highlights

The Report

• Spending by federal regulatory agencies continues to increase at a faster pace than other nondiscretionary spending, according to the 2005 annual Regulators' Budget 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.
• The 27th annual Regulators' Budget report, Upward Trend in Regulation Continues: An Analysis of the U.S. Budget for Fiscal Years 2005 and 2006, examines the Budget of the U.S. Government to track the expenditures and staffing of federal regulatory agencies between 1960 and 2006.

Our Findings

• The regulators' budget is growing at a faster rate than other nondiscretionary spending.
• Regulatory activities related to homeland security receive the largest budget increases in FY 2006. The budget of agencies now housed in the Department of Homeland Security has doubled since 2001.
• Other regulatory activities slated to receive large budget increases in 2006 include the Patent and Trademark Office, the Environmental Protection Agency, and the Food and Drug Administration.
• Staffing at federal regulatory agencies is expected to reach an all-time high in 2006. The number of federal employees responsible for regulating private sector activities is over four times what it was in 1960.

By the Numbers

• The Regulators' Budget is estimated to be $41.4 billion in 2006, up from $39.5 billion in 2005.
• The FY 2006 Budget of the United States Government calls for a 4.8 percent nominal (2.9 percent real) increase in outlays directed at writing, administering, and enforcing federal regulations.
• This is larger than the overall nominal increase in nondiscretionary spending of 2.1 percent, and about the same as the 2005 increase of 4.8 percent nominal (3.0 percent real).
• Since 2000, the Regulators' Budget has increased 46 percent.
• The Department of Homeland Security is budgeted to receive an additional $1.1 billion in regulatory funding over last year. DHS's budget for administering regulation is the largest of any agency at $18 billion.
• The FY 2006 Budget also includes large increases in outlays at the Environmental Protection Agency ($250 million), the Food and Drug Administration ($191 million), and the Patent and Trademark Office ($351 million).
• Staffing at the federal regulatory agencies is expected to reach an all-time high of 242,376 in 2006, a 0.6 percent increase over 2005.

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.