It confirmed that Fiscal Year 2012 was the costliest year ever for federal regulation, which can be credited in part to finalized major rules on vehicle fuel efficiency and coal-fired power plant emissions. In contrast, FY 2013, which is the main subject of the 2014 report, imposed the lightest burden of any year during the Obama administration and was one of the least active years of the past decade. The 2014 report estimates roughly $2.3 billion (in 2001 dollars) in annualized costs from regulation in 2013. But it derives that estimate by examining just seven rules that were finalized that year. If the report had examined all of that year’s rules, the cost figure would be around $7.2 billion, or roughly three times the “official” figure.

Politics and regulation / Figure 1 shows the estimated cost of federal regulation for each fiscal year from 2002 to 2013, including the remarkable drop from 2012 to 2013. Why did that drop occur? Politics may have been at play. According to media reports, political influences likely delayed several notable regulations in 2013, including a rule to reduce the sulfur content in gasoline (part of the “Tier 3” vehicle emissions standards). The first quarter of FY 2013 occurred during the election season in 2012, so there may have been an impetus to delay a few controversial rules. For example, had the administration finalized the Tier 3 standards during FY 2013, it alone would have imposed $1.5 billion in annual burdens, raising that year’s total to $3.4 billion (in 2001 dollars).

Yet another caveat on the low cost for FY 2013: all of the White House figures are in 2001 dollars. For example, the $19.5 billion in annualized costs for 2012 is actually $25.7 billion in today’s dollars. If we were to include the cost of all rules—and the economy would surely bear those burdens—the total federal imposition was $38.6 billion (in 2013 dollars). Thus, in addition to the $27 billion in new taxes for 2013, regulatory burdens added $38.6 billion in costs, for a total of $65 billion in government burdens on the economy. However, as with most talk of regulation in public rhetoric, the “fiscal cliff” tax deal that was hammered out in late 2012 consumed all of the political oxygen, leaving historic regulatory costs largely unreported.

The $2 billion figure for FY 2013 might appear low. It does not represent all regulatory costs and benefits for the fiscal year, and even the administration acknowledges this reality. The report on regulation merely examines all major rules that monetize both costs and benefits that exceed $100 million annually. For example, an expensive Dodd-Frank rule or a health care regulation that lacks benefit data will not be tallied in the annual figures. Among the notable rules omitted from the official results in the recent report:

• ACA standards for Medicaid, the Children’s Health Insurance Program, and insurance exchanges: $1.3 billion in annualized costs
• Dodd Frank regulation on swaps between affiliated entities: $650 million
• Affirmative Action guidelines for federal contractors: $395 million

With just seven major rules with monetized costs and benefits, the 2014 report contains the fewest number of rules since the 2006 edition, which examined six. The previous low for the Obama administration was 12 rules from the 2011 report. Table 1 lists the seven rules that OIRA highlighted in the 2014 report (costs and benefits in 2001 dollars).

For comparison on scale, the U.S. Environmental Protection Agency’s new regulation on existing power plants under Section 111(d) of the Clean Air Act could impose approximately $8.8 billion in costs annually. Regardless of the overall magnitude of costs, OIRA’s tally is still a small fraction of total federal rulemaking, but the administration claims the report captures a “vast majority” of costs and benefits. For benefits, this may be true because few rules monetize benefits, but for costs the reported total will be just a slice of the total burden.

We examined every final rule published in FY 2013 and found $9.1 billion in annualized costs ($7.2 billion in 2001 dollars) and $40 billion in annualized benefits ($33.5 billion in 2001 dollars). Thus, OIRA underreports costs by more than 300 percent compared to a benefit figure approximately 10 percent of the actual total. Although OIRA will report benefits that are the majority of the published figure, the report’s methodology will exclude billions of dollars in costs.

Future reports / In response to public comments, the OIRA report did undertake several reforms. Notably, the administration is now reporting figures “in both 2010 and 2001 dollars, in order to provide estimates that are closer to current year dollars.” It made little sense for an agency to report costs and benefits in 2010 dollars, only to have OIRA convert to 2001 dollars and then to have the public adjust to current-year dollars to make sense of the data. For example, the $19.5 billion record cost figure from FY 2012 is now reported as $23.6 billion.

In addition, criticism from the Mercatus Center and the George Washington University Regulatory Studies Center about comparing the regulatory performance of different administrations prompted OIRA to assure readers that future reports will no longer contain this politicized data. As OIRA concedes, “[C]omparisons of prospective analyses across time become more difficult as rulemakings are modified or remanded due to court rulings … or simply don’t have the impacts projected before the rule was issued.” Critics charged that such comparisons reeked of politics.

Conclusion / The final figures in any year depend on the pace of new rulemakings. That pace has been very aggressive so far in 2014, but the administration may become averse to releasing controversial rules as this fall’s election nears. Whatever the speed of new rulemaking, total burdens from the past two years have eclipsed $47 billion in today’s dollars ($38.6 billion from FY 2012 and $9.1 billion from FY 2013). Recent totals might have been low, but that was likely an aberration based on a political calculus rather than a genuine attempt to reduce regulatory growth.