Wednesday, December 31, 2003


This New York Times article analyzes the Bush administration's approach towards regulation. What irritated me was this mention of the number of pages in the Federal Register:
"As far as I can tell, he has not uttered the word `deregulation' since 2001," said James L. Gattuso, a research fellow in regulatory policy at the Heritage Foundation, who recently completed a study of regulation in the Bush era. "This stuff about the antiregulation president is a Howard Dean myth," he argued.
* * *
Indeed, Mr. Gattusso sees no decline in overall government regulation in the Bush years — he counts 75,000 pages of the Federal Register filled with new rules this year. It is the kind of statistic Mr. Bush liked to cite in less than complementary terms in the last presidential election.
Of all the ways to estimate the scope and effect of federal regulations, a page count from the Federal Register has to be one of the least helpful, although it is apparently quite common among anti-regulatory folks. First, most of the pages of the Federal Register do not contain final regulations at all. Rather, agencies are constantly issuing "Notices of Proposed Rulemaking," which often take up 50 to 100 pages, in which they ask for comments on a proposal to change an existing regulation or add a new one. In fact, out of 75,000 pages in the 2002 Federal Register, only about 19,000 were devoted to final rules. (See page 9 of this Cato report.)

Still, that's 19,000 pages, one might say. It does sound like a lot of regulation. But the page-count metric is still grossly misleading. First, final "rules" are almost always accompanied by a lot of extra verbiage, in which the agencies explain in exhaustive detail how they arrived at the final rule, what they thought of the comments submitted, and why they didn't choose a different rule.

Second, many final rules do not create brand new regulations in areas where no regulation existed before. Many, if not most, final rules simply replace a pre-existing rule by modifying it in light of changed circumstances or new research. To take an area with which I'm deeply familiar, the FCC issued an new telecommunications rule in August called the Triennial Review. It was massive. But all that the Triennial Review did was tweak telecom regulations that already existed, and which themselves already took up several hundred pages (including accompanying explanations) in the Federal Register from previous years. In fact, the effect of the Triennial Review was to loosen, if only slightly, those pre-existing regulations.

Imagine this hypothetical: The Federal Fruit Commission issues a Notice of Proposed Rulemaking in 2004 asking for comments on whether it should ban the sale of green bananas. This takes up 50 pages in the Federal Register. In 2005, the FFC issues a final rule banning the sale of bananas that are more than 75% green. The rule itself is two lines long, but is accompanied by 100 pages of explanation. In 2006, the FFC has realized that the grocery industry hates the rule. It issues another NPRM of 50 pages asking whether it should change the rule to apply to 50% green bananas. In 2007, the FFC issues another two line rule, with 100 pages of explanation, changing the previous rule to read "50%." In 2008, the FFC realizes that people are still unhappy, and that the rule doesn't really accomplish any public good. It issues another 50-page NPRM asking if the rule should be eliminated. Then, in 2009, the FFC finally gets rid of the green banana rule, along with 100 pages of explanation.

If you looked at pages in the Federal Register, you might say, "Oh my goodness, the FFC has produced 450 pages in the past 6 years just on green bananas. Regulation is out of control!" But nowhere are there "450 pages of rules" that apply to green bananas. In fact, at that point, the green banana rule would no longer exist, and the regulatory burden would be zero. Of course, the 450-page number might be useful if you want to approximate the societal effort spent on dealing with federal agencies -- i.e., monitoring rulemakings, writing comments, etc. But "450 pages" would not in any sense represent the actual regulatory burden on anything.


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