House Speaker John Boehner (R-Ohio) made a very specific claim in his economic speech yesterday, much of which was devoted to touting deregulation.
“At this moment,” the Ohio Republican said, “the Executive Branch has 219 new rules in the works that will cost our economy at least $100 million. That means under the current Washington agenda, our economy is poised to take a hit from the government of at least $100 million — 219 times.”
Glenn Kessler did a nice job scrutinizing the claim, and getting to the bottom of the figure Boehner is so fond of.
The federal government is required to identify regulations that could have an economic impact of more than $100 million, but people frequently misunderstand what that means. It does not necessarily mean $100 million in costs; in fact, it can also mean more than a $100 million in benefits.
The Congressional Research Service earlier this year made this clear when it examined the 100 major regulatory rules issued in 2010. The report — which is actually posted on the speaker’s Web site — found that 37 of the 100 rules were deemed “major” because they involved the transfer of federal funds to recipients (such as grants, food stamps, or crop payments). In most cases, this meant more money in people’s pockets, not costs to businesses. (There were another nine rules that decreased transfer payments.)
Six of the rules were labeled major because they triggered economic activity by consumers; these all had to do with hunting seasons and bag limits for certain types of migratory birds. Four other rules established new fees (such as increased costs for passports) to fund government operations; others were considered “major” for a variety of reasons.
Finally, 39 of the 100 rules were expected to have either $100 million in annual compliance costs, $100 million in annual benefits, or both. In some cases, the ranges were so large that it was difficult to conclude whether the result was a positive or negative benefit. But in 14 cases, the lowest estimate of the benefits exceeded the highest estimate of the costs.
As for the specific 219 figure, apparently some Bush administration veteran found a wish list from the Office of Management and Budget website, listing 219 possible new regs. Most of them will never make it through the regulatory review process, and many of the proposed new rules wouldn’t affect the economy in the short run at all.
So, when Boehner claims the economy is “poised to take a hit from the government of at least $100 million, 219 times,” everything about the argument is plainly false.
This was a speech delivered by Washington’s most powerful Republican, and it was a carefully-crafted argument. The larger pitch was economically illiterate anyway, but in this case, we’re talking about the Speaker just making up facts, pointing to regulations that, according to materials posted on Boehner’s own website, will help the economy. The Speaker was pointing to rules that have the opposite effect of what he claimed.
Anyone who assumes John Boehner knows what he’s talking about is making a mistake.
