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Sequester has minimal impact on federal regulatory spending, new report finds

Date:
July 23, 2013
Source:
Washington University in St. Louis
Summary:
Automatic federal budget cuts, known as the sequester, which began March 1, have had minimal impact on federal regulatory agencies, finds a new report on the U.S. budget for fiscal years 2013 and 2014.

Automatic federal budget cuts, known as the sequester, which began March 1, have had minimal impact on federal regulatory agencies, finds a new report on the U.S. budget for fiscal years 2013 and 2014.

"Regulatory agencies' budgets are growing faster than inflation in 2013, despite concerns about the sequester," observed report authors Melinda Warren of Washington University in St. Louis and Susan Dudley of George Washington University. "Their budgets are projected to continue growing in 2014, due to a combination of new legislative authorities and presidential priorities."

The estimated cost of running regulatory agencies in fiscal year 2013 is $56.4 billion, an inflation-adjusted increase of 0.9 percent over 2012 spending. President Barack Obama's proposed budget for regulatory agencies increases to $59.4 billion in 2014.

The on-budget cost of regulation is detailed in a new report, Sequester's Impact on Regulatory Agencies Modest: An Analysis of the U.S. Budget for Fiscal Years 2013 and 2014.

The annual report is published by the Weidenbaum Center on the Economy, Government and Public Policy at Washington University in St. Louis and the George Washington University Regulatory Studies Center.

This report presents more than 50 years of data on the expenditures and staff employed to run federal regulatory agencies. These data are extracted from the Budget of the United States Government, prepared annually by the Office of Management and Budget and submitted by the president to the Congress.

This is the 35th edition of the report tracking the spending and staffing for the regulatory agencies as documented in the president's budget. It includes data from 1960-2014.

The largest regulatory budget increases in 2013 and 2014 are going to:

-The Food and Drug Administration (with more than $600 million additional outlays each year to implement the Food Safety Modernization Act of 2011).

-The Patent and Trademark Office, which the America Invents Act of 2011 authorized to set its own fees (with increases of $399 million in FY 2013 and $293 million in 2014).

-Customs and Border Protection (with increases of $115 million in FY 2013 and $542 million in FY 2014).

-Financial agencies to which the Dodd-Frank Wall Street Reform and Consumer Protection Act granted new authority, particularly the Securities and Exchange Commission (more than $250 million each year), the Comptroller of the Currency ($18 million in 2013 and $368 million in 2014), and the Consumer Financial Protection Bureau ($116 million in 2013 and $158 million in 2014).

Staffing at regulatory agencies is projected to increase in both the current and next fiscal years.

-Federal regulatory agencies employ an estimated 282,070 people in FY 2013, a 1.6 percent increase over FY2012. The Budget requests an additional 0.7 percent increase in FY2014, bringing personnel to 284,085.

-Financial regulators (particularly the Consumer Financial Protection Bureau, the Commodity Futures Trading Commission, and the Securities and Exchange Commission) are set to increase personnel significantly (more than 2,000 new staff for those three agencies over two fiscal years). The Federal Deposit Insurance Corporation faces significant staff reductions in both 2013 and 2014 that would bring its staffing levels back to what they were in 2008 and 2009.

-The Patent and Trademark Office continues to grow, with more than 2,000 new employees projected over the 2 years.

-The Food and Drug Administration is projected to add more than 1,000 people each year (reflecting a growth rate of 7.5 percent in 2013 and 6.9 percent in 2014).

-Within the Department of Homeland Security, only Customs and Border Protection is budgeted for more staff in 2014. Its employment increased by 790 people in 2013 and another 990 in 2014. The 2014 Budget requests more than a 900-person reduction at Immigration & Customs Enforcement after an increase of 100 employees in 2013.

This report tracks the "regulators' budget," that portion of the fiscal budget devoted to developing and enforcing federal regulations that alter private sector behavior, from 1960 to 2014. Though these on-budget costs of regulation represent a small fraction of the full cost of regulations to society and do not provide information on regulations' benefits, the time-series data presented here offer useful insights into the growth and composition of regulation over the last 54 years, as well as current priorities.

These data cover agencies whose regulations primarily affect private sector activities, and expressly excludes budget and staffing associated with regulations that govern taxation, entitlement, procurement, subsidy, and credit functions. For example, the Internal Revenue Service, the Social Security Administration, and the Department of Defense are not included, although they issue regulations.

The Department of Health and Human Services Center for Medicaid and Medicare Services (CMS), while issuing about one-third of all the final regulations published in a typical year, has traditionally been excluded because its regulations have primarily addressed the allocation of entitlements.


Story Source:

The above story is based on materials provided by Washington University in St. Louis. Note: Materials may be edited for content and length.


Cite This Page:

Washington University in St. Louis. "Sequester has minimal impact on federal regulatory spending, new report finds." ScienceDaily. ScienceDaily, 23 July 2013. <www.sciencedaily.com/releases/2013/07/130723134245.htm>.
Washington University in St. Louis. (2013, July 23). Sequester has minimal impact on federal regulatory spending, new report finds. ScienceDaily. Retrieved September 2, 2014 from www.sciencedaily.com/releases/2013/07/130723134245.htm
Washington University in St. Louis. "Sequester has minimal impact on federal regulatory spending, new report finds." ScienceDaily. www.sciencedaily.com/releases/2013/07/130723134245.htm (accessed September 2, 2014).

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