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Bush Plus

Addressing the Pacific Research Institute’s first annual efficiency in government awards dinner earlier this year, former Federal Trade Commission Chairman Daniel Oliver told a story about the famous tennis star Ilie Nastase, who had his wallet stolen with all of his family’s credit cards in it. It seems a friend asked the tennis player if …

Addressing the Pacific Research Institute’s first annual efficiency in government awards dinner earlier this year, former Federal Trade Commission Chairman Daniel Oliver told a story about the famous tennis star Ilie Nastase, who had his wallet stolen with all of his family’s credit cards in it. It seems a friend asked the tennis player if he had called the police. When Nastase said he had not, his puzzled friend asked him why. “Well,” said Nastase, “so far the thief is spending less than my wife,” which was the way Oliver said he felt about the early days of the Clinton Administration. At the time, the Clintonites hadn’t produced as many regulations or extraordinary tax burdens on the economy as had the Bush crowd. By this time, we reckon, he would have called the police.

Throughout the last campaign, candidate Bill Clinton charged that so-called trickle-down economics was a failure, and that the domestic economy had to be repaired. One conspicuous promise he made in his campaign book, “Putting People First,” related directly to government inefficiency. “I have recommended that we eliminate by attrition-not by firing anybody, but by attrition-100,000 people from the federal work force over the next couple of years.” Clinton also pledged to cut White House staff by 25 percent and administrative waste by 3 percent in every federal agency.

For the last decade and a half, the Center for the Study of American Business at St. LouisWashington University has tracked regulatory budgets. As the charts below show, the rapid buildup in regulatory spending in the 1970s was followed by decreases during Reagan’s first term and gradual increases toward the end of his second term. As we pointed out in these pages in our interview with then-Secretary of Commerce Barbara Franklin, George Bush’s tenure showed a jump in regulatory costs. According to Melinda Warren, CSAB assistant director, who analyzed the 1994 federal budget, regulatory spending projections appear to be stabilized, and in nominal terms may be slightly negative. But staffing trends, perhaps a better indicator of regulatory activity, tell a different story. Staffing will reach record levels by 1994. Warren’s study reveals that Clinton’s first budget reverses a trend that predominated since the data have been tracked: Expenditures for social regulation are decreasing, while economic regulation is rising, a result mirrored by staffing changes.

Many researchers have tried to calculate the cost to the U.S. economy of compliance with federal regulations. Estimates of costs to business range from $67 billion to $510 billion each year. By even the late Sen. Everett Dirksen’s estimate, this adds up to “real money.” Change has been the mantra of the Clintonites, but this looks like more of the same.

About JP Donlon

JP Donlon is the Editor-in-Chief of Chief Executive magazine.