Regulatory Costs Burden American Households Heavily

Clear Facts

• Federal regulations in 2024 imposed a total cost of $2.155 trillion on Americans, according to a report by the Competitive Enterprise Institute (CEI).
• This regulatory burden translates into a “hidden tax” of $16,016 per American household annually, consuming 16% of household income and 21% of household expenses.
• CEI’s report highlights that the Biden administration averaged 846 new rules annually, surpassing both the Obama and Trump administrations in regulatory additions.

In a revealing report from the Competitive Enterprise Institute (CEI), the cost of federal regulations in 2024 reached an astounding $2.155 trillion. This figure, which includes compliance costs, acts as a “hidden tax” on American households, amounting to $16,016 per year for each household.

This financial strain represents a significant portion of household budgets, consuming 16% of income and 21% of expenses.

Clyde Wayne Crews Jr., the report’s author and CEI’s Fred L. Smith Fellow in Regulatory Studies, emphasized the economic impact of these regulatory costs.

He noted, “Off-budget or not, these regulatory costs drag down the economy, much as overspending can.”

Crews further explained that, similar to corporate income taxes and tariffs, regulatory compliance costs are ultimately borne by consumers, manifesting as increased prices, job losses, and reduced economic output.

The report also pointed out the role of federal debt in exacerbating regulatory burdens. Crews highlighted that while new spending programs are visible in budget figures, many regulations impose costs on the private sector without appearing in official budgets.

“Off-budget regulations have grown common despite congressional attempts to limit them,” he wrote.

A significant portion of these regulatory costs can be attributed to the Biden administration, which introduced an average of 846 new rules annually affecting small businesses.

This figure surpasses the averages of both the Obama administration, which had 694 rules annually, and the first Trump administration, with 701 rules annually.

Critics argue that the Biden administration’s extensive spending has contributed to high inflation rates. As of the report’s release, the U.S. national debt stood at $36.22 trillion, with the national deficit reaching $1.31 trillion.

The CEI report underscores the lack of transparency in disclosing regulatory costs, contrasting with the federal government’s public disclosure of fiscal costs from spending on programs and services.

This lack of transparency adds another layer of concern regarding the economic impact of these regulations.

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