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Regulation without Representation

Regulation without Representation. Harriet M. Hageman Hageman & Brighton, P.C. Current Financial Climate. Federal Government Debt Over $ 15 trillion dollars 110 th Congress (01/07 to 01/09) increased debt by $1.957 trillion

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Regulation without Representation

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  1. Regulation without Representation Harriet M. Hageman Hageman & Brighton, P.C.

  2. Current Financial Climate • Federal Government Debt • Over $ 15 trillion dollars • 110th Congress (01/07 to 01/09) increased debt by $1.957 trillion • 111th Congress (01/09to 01/11) added $3.22 trillion to the overall debt. • More than the first 100 Congresses combined. • $10,429.64 new debt per person in US

  3. Three Branches of Government • Executive (President, Governor) • Leislative (Congress, State Legislatures) • Judicial

  4. Executive Branch -- Where Regulations are Born • U.S. President • Governors • Federal and State Agencies • What happens once the legislation is passed?

  5. The “Real Governing Class” • Congress vs. Regulation • In 2009, Congress passed 125 bills • Over 3,500 Regs adopted by Federal Agencies • In 2010, Congress passed 217 bills • Over 3,500 Regs adopted

  6. Regulations – A Primer • Regulations - Federal • Endangered Species Act • National Environmental Policy Act • Clean Air Act • Clean Water Act • Section 404 Permits • “Waters of the United States” • “Navigable Waters” • “Interpretation”

  7. Agency “interpretation” of Statutes • Limits of Federal Jurisdiction under Clean Water Act: To “navigable waters of the U.S.” • EPA interpretation as described by U.S. Supreme Court in Rapanos v. U.S.

  8. Regulatory Expansion – From Bad to Worse • Under a recent federal directive, the number of health-care reimbursement categories will soon increase from 18,000 to 140,000, including 21 separate categories for “spacecraft accidents” and 12 for bee stings. • There are over 100,000,000 words of binding federal statutes and regulations, and states and municipalities add billions more.

  9. Regulations – Costly and Contradictory Redundancy • Federal Regulations - Examples • Clean Water Act • Endangered Species Act • National Forest Management • State Regulations • Enforcement of the Clean Water Act • Game and Fish Regulations • Management of State Forest Lands

  10. Redundant Redundancy (cont.) • EPA (federal); DEQ (state) • Enforcement of CWA, CAA, stormwater runoff, land quality, etc. • Dept of Transportation (federal and state) • Dept of Education (federal and state) • Recently created by the President – An Office of the Regulator of Regulators

  11. Examples of Regulatory Overreach – have we gone crazy? • Pythagorean Theorem……………………..24 words • First Amendment to the U.S. Const….......45 words • Lord’s Prayer ……………………………….66 words • Archimedes’ Principle……….....................67 words • 10 Commandments …………………….. 179 words • Gettysburg Address………......................286 words

  12. Have We Gone Crazy cont. • Declaration of Independence…………….1300 words • U.S. Govt. Regs on Cabbage Crop Insurance …………………………………3500 words • U.S. Constitution (w/ 27 Amend) ………7,818 words • U.S. Govt. Regs on Special Rules for Experimental Populations of T and E Wildlife and Plants ……...over 36,000 words

  13. Have We Gone Crazy cont. • The federal worker-safety laws include some 4,000 rules dictating precisely what equipment shall be used and how facilities are built. • Embarrassingly self-evident: stairways shall be lit by “natural or artificial illumination.”

  14. Hidden (indirect) Costs and Regulatory Burdens: The Real Definition of a Crises • 1992- Regulation Costs: $400 billion • 2008- Regulation Costs: $1.75 trillion • SBA Reports: • 2005 Regulatory Employee Cost: $7,647 • 2008 Regulatory Employee Cost: $10,585 • 2008 Costs do not include • Obamacare • Dodd/Frank financial “reform” • EPA Regulations

  15. Regulatory Costs cont. • 2008 Regulatory Costs – nearly twice as much as all individual income taxes collected • 2009 Americans paid $ 989 billion in income taxes • Income tax rate must be disclosed • No similar requirement for costs of regulations • Unless have an “impact” of $ 100,000,000.00 or more

  16. Regulatory Costs cont. • Given 2010’s actual Gov’t. spending of $3.456 trillion dollars, the regulatory “hidden tax” ($1.75 trillion) stands at an unprecedented 50.7% of the level of federal spending itself. • In absolute terms, the U.S. Gov’t is the largest government on planet earth. • Regulations and deficits each exceed $ 1 trillion per year.

  17. Regulatory Costs, cont. • Regulatory costs exceed all 2008 corporate pre-tax profits of $ 1.463 trillion. • Regulatory costs dwarf corporate income taxes of $ 157 billion. • Regulatory costs absorb 11.9% of the U.S. GDP (estimated at $14.649 trillion in 2010) • Combining regulatory costs with federal FY 2010 outlays of $ 3.456 trillion reveals a federal gov’t whose share of the entire economy now reaches 35.5%.

  18. EPA Regulation of Carbon • Destroy 1.4 million U.S. jobs and cost the economy up to $141 billion by 2014 • 200,000 American manufacturers could lose their jobs • Historically, $ 1 billion worth of investment = 15,500 jobs • 2015 to 2026 average annual impact of carbon regulation would be more than 500,000 jobs, and by 2029 the total economy-wide cost would be close to $7 trillion (roughly ½ of America’s current GDP)

  19. EPA Regulation of Carbon • “No significant impact on reducing global GHG emission growth” • (American Council for Capital Formation)

  20. Obama’s Executive Order on Regulations • Announced in January, 2011: “A government-wide review of the rules already on the books to remove outdated regs that stifle job creation and make our economy less competitive.” • 1 rule repealed last year – spilled milk is no longer considered an “oil spill.” • By Nov., 2011, 508 new rules deemed “significant” – meaning will cost in excess of $ 100 million each (minimum impact: $50,800,000,000) • By December 2, 2011, 760 new rules deemed “significant” (minimum impact: $ 76,000,000,000)

  21. Regulatory Burden 2011 – A Summary • Pages of regulations published in the Federal Register (2011) • 53,630 as of 9/10/11 • 67,036 as of 10/31/11 • 70,320 as of 11/17/11 • 75,770 as of 12/2/11 • Million hours of annual paperwork burden • 65.1 million hours as of 9/10/11 • 88.2 million hours as of 10/31/11 • 116.3 million hours as of 11/17/11 • 119.4 million hours as of 12/2/11

  22. 2011 Regulations – Administration Estimates • Obama Administration’s cost estimate for the 427 proposed or enacted regulations for 2011 was $ 69.1 billion ($69,100,000,000.00) • Administration announced in August that it is considering 7 new regulations that will cost the economy more than $ 1 billion per year.

  23. 2011 cont. • The Administration estimates that one EPA rule alone will cost the economy between $19 billion and $ 90 billion ($19,000,000,000.00 to $90,000,000,000.00). • July, 2011 (during “debt-ceiling” debate) - Administration proposed 229 new rules and finalized 379 rules • Agencies’ Estimated Cost: $ 9.5 billion

  24. Regulatory Burden – End of January, 2012 • 381days since Executive Order on Regulations • 0 Rules repealed this year • 55 Rules deemed “significant” • $ 8.3 Billion – cost of regulatory burdens from new rules this year • 5680 pages in the Federal Register this year • 30.6 million hours of annual paperwork burden

  25. Regulatory Burden – February 17, 2012 • 395 days since President’s Executive Order on Regulations • 0 Rules repealed this year • 119 Rules deemed “significant” • $ 24.3 Billion – cost of regulatory burdens from new rules this year • 9514 pages in the Federal Register this year • 44.1 million hours of annual paperwork burden

  26. Regulatory Burden – March 2, 2012 • 409 days since President’s Executive Order on Regulations • 0 Rules repealed this year • 153 Rules deemed “significant” • $ 24.9 Billion – cost of regulatory burdens from new rules this year • 12,980 pages in the Federal Register this year • 46.1 million hours of annual paperwork burden

  27. February 16, 2012 - EPA • The EPA published the Utility MACT (Maximum Achievable Control Technology) rule on Thursday, February 16, 2012. EPA estimates the costs of Utility MACT to be $9.6 billion • The cost of the rule exceeds the benefits by between 1,600 and 19,200 to 1. • Rule threatens electric reliability

  28. Costs of Overregulation – Not Just Monetary • Destruction of our National Forests • 2001 Roadless Rule • Pine Beetle Outbreak • Routt National Forest – ground zero • GAO Studies

  29. Balanced Approach is Critical • If we destroy our economy we cannot protect our environment • When the government directs its resources to doing things it should not be doing, it becomes incapable of doing those things that it should • A government that is closest to the governed is more responsive and accountable

  30. Real Solutions • Regulation must be radically simplified • Individual accountability must replace bureaucratic micromanagement • Mandatory sunsets • Small entities must be regulated differently Source: Philip K. Howard, Common Good

  31. QUESTIONS OR COMMENTS? • Harriet M. Hageman • Wyoming Conservation Alliance • Colorado Resource Alliance • Hageman & Brighton, P.C. • 222 East 21st Street • Cheyenne, Wyoming 82001 • (307) 635-4888 • hhageman@hblawoffice.com

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