Economically Significant Rules
We know that federal regulation affects the balance of intergovernmental power. But what are the costs to states, local governments, and small businesses? This dashboard presents users with the tools they need to understand the various ways that rules are quanitifed in terms of the effect they have on the overall economy. We focus on "Economically Significant Rules" because these help users understand the history of the attempt to measure the cost-benefit analysis of federal regulations. The first chart, below, represents a raw count of ESR by presidential year from 1981-2018.
An economically significant rule defined in EO 12866 as one that "has an annual effect on the economy of $100 million or more...or adversely affect in a material way the economy...or State, local, or tribal governments or communities."
Types of Rules
Since 1976, when the Federal Register first began itemizing and counting, 204,802 final rules have been issued. Rules come in many types, and these are important to understand for measurement purposes. Users can refer back to this page for definition. For simplicity, this dashboard focuses mainly on three kinds of rules, in order from largest to smallest. Graphically, they look roughly like this:
Economically Significant Rules > Major Rules > Significant Rules > Substantive Rules
Economically Significant Rules Published
Economically Significant Rules are rules that are likely to have a $100 million or more effect on the economy or can “adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.” The data for this series is taken from the Economically Significant Rules published by OIRA for the corresponding years.
Sources: OIRA Historical Reports
Major Rules Published
A major rule is similar to an Economically Significant Rule in that they both are estimated to have an annual impact on the economy of over $100 million, however, it differs in that it also can cause “a major increase in costs or prices for consumers, individual industries, federal, state, or local government agencies, or geographic regions;” as well as have “significant adverse effects on competition, employment, investment, productivity, or innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.” The data used in this series is from all major rules submitted to the U.S. Government Accountability Office for each corresponding year.
Sources: GAO Reports on Major Rules
A significant rule is a broader category of regulatory actions and includes economically significant rules as well as other significant rules. Significant rules also meet one or more of the requirements found in EO 12866 which states that it “create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in [Executive Order 12866].” The data used in this series comes from the historical reports on the unified agenda and regulatory plan for each corresponding year. It is important to note that for the year 2012, only one report was available, instead of the normal fall and spring reports that were available for the other years.
Sources: Unified Agenda - Advance Search
Substantive but not Significant Rules
A substantive but nonsignificant rule is a rule that while having substantive impacts, does not meet the requirements to be classified as another type of rule (such as major, economically significant, administrative, etc.) The data used in this series comes from the historical reports on the unified agenda and regulatory plan for each corresponding year. It is important to note that for the year 2012, only one report was available, instead of the normal fall and spring reports that were available for the other years.
Sources: Unified Agenda - Advance Search
Final Rules Published
When a rule is classified as a final rule, it means that it has already gone through the revision and review process with OIRA. Once it is published in the Federal Register, the new rule will go into effect after a wait period of 30-60 days. In this series, the data is taken from the total final rules published in the Federal Register for each corresponding year.
Sources: Federal Register Documents Published 1976-2018
Proposed rules are published in the federal register to allow those interested to participate in the rulemaking process, give the agency the opportunity the ability to address concerns, and show proposed changes or modifications to existing rules. This data series takes the number of proposed rules published in the Federal Register for each corresponding year.
Sources: Federal Register Documents Published 1976-2018
Economically Significant Rules in Context
The graph below ranks Economically Significant Rules by presidential year. The most dramatic increase in the use of ESR occurred in 2016 (99 ESR), 2008 (73) - at least until 2020, during the Coronavirus pandemic. In 2020, Congress or agencies passed 134 ESR, nearly double the amount of ESR passed after the 2008 financial crisis:
Economically Significant Rules by Agency
Compared to Economically Significant Rules
Rules estimated to have a cost under $100 million still impose significant costs. A "Major" rule is one example of a category that falls below the $100 million threshold. According to Crews (2020), Trump issued the lowest number of Major rules in his first term, on record. President Obama issued 69 Major rules on average per year. President George W. Bush issued 49 Major rules on average per year. In 2020, Trump's average was 64 Major rules per year. But as Crews notes, "[Trump's] Agendas are the first to contain expressly deregulatory economically significant rules" (2020, 6).
Compared to ESR and Major Rules
Significant rules, according to Crews, 486 of President Obama's 3,853 final rules in 2016 were deemed "significant." This was the highest count in the last two decades. By contrast, the Trump administration issued, by our count, on average, 124 per year of the first three years of his presidency.
"The American people deserve a regulatory system that works for them, not against them: a regulatory system that protects and improves their health, safety, environment, and well-being and improves the performance of the economy without imposing unacceptable or unreasonable costs on society; regulatory policies that recognize that the private sector and private markets are the best engine for economic growth; regulatory approaches that respect the role of State, local, and tribal governments; and regulations that are effective, consistent, sensible, and understandable. We do not have such a regulatory system today."
-President Clinton, Executive Order #12866 Regulatory Planning and Review
Problems and Highlights
This dashboard has presented only a summary view of rules that have significant economic effects. In order from largest to smallest, we have looked at "economically significant rules," "major" rules, and "significant rules.
Researchers and practitioners may want to include ESR that are deemed "Deregulatory" in future considerations of the effect of ESR on American Federalism (see, e.g., Crews 2020 p. 62). It is not impossible to imagine an increase in the usage of ESR that are intended to reduce costs, as a result of the implementation of Executive Order 13771.
Categorization of "ESR" raises inescapable problems of measurement. As Crews (2020, p. 33) notes, there are unmeasured costs of rules not "deemed" economically significant. There are unmeasured costs to the loss of autonomy. There are distortions in markets created by administratitve spending. There are unfathomed costs of government failure or interference with market institutions. There are information costs, as a result of administrative transfer of power away from the states. Finally, there are "componound" costs from administrative over-reach, which may have effects across the decades and centuries.
This dashboard does not distinguish between Completed, Active, and Long-term ESR. Future research may also want to consider trends in the use of ESR in the Spring or Fall. More resarch on the use of ESR in the early, middle, and late phases of the Presidency may also yield interesting results.
In general, heightened scrutiny of ESR is a positive development. However, as other scholars have noted, this heightened scrutiny may tempt analysts or state leaders to overlook the mass of rules in the annual pipeline (Crews, p. 66 2020). President Trump's "2 for 1" order has had ambiguous effects. Agencies can still use "significant" rules or other guidance documents that "fly below the radar of two-for-one constraints" (ibid.). As of 2020, it is not clear whether President Trump's streamlining of ESR has had much effect in offsetting long-term regulatory ESR.
Finally, this dashboard does not consider the impact or volume of rules affecting small business or the economies of individual states.
Crews, Clyde Wayne, Jr. Ten Thousand Commandments An Annual Snapshot of the Federal Regulatory State. Report. Competitive Enterprise Institute. 2019 ed. Washington, D.C. 1-113. https://cei.org/sites/default/files/10KC2019.pdf
Crews, Clyde Wayne, Jr. What’s the Difference between “Major,” “Significant,” and All Those Other Federal Rule Categories? A Case for Streamlining Regulatory Impact Classification. Report no. 8. Competitive Enterprise Institute. 2017. 1-26. https://cei.org/content/whats-difference-between-major-significant-and-all-those-other-federal-rule-categories
Logomasini, Angela, and Henry I. Miller. "It’s Time to Shine a Light on Regulatory ‘Dark Matter’." National Review, February 20, 2017. https://www.nationalreview.com/2017/02/federal-bureaucracy-regulatory-dark-matter-kills-innovation/
Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget, U.S. General Services Administration
"Reg Stats" (Regulatory Studies Center, Columbian College of Arts & Sciences and George Washington University)
Attempts to accurately assess the impact of regulatory activity may be complicated by the thousands of combined executive branch and federal agency actions that have binding regulatory effects, but are subject to little or no empirical scrutiny. Some analysts refer to this activity as "regulatory dark matter." For critical analysis, see:
Crews, Clyde Wayne, Jr. "Here's What Donald Trump and Congress Should Do About Regulatory Dark Matter." Forbes, March 14, 2017. https://www.forbes.com/sites/waynecrews/2017/03/14/heres-what-donald-trump-and-congress-should-do-about-regulatory-dark-matter/#39708e47413a
"It's Time to Shine a Light on Regulatory Dark Matter," (National Review 2017)