GATTUSO and KATZ: The 10 worst regulations of 2013

New rules cost Americans a bigger slice of their earnings and freedom

There are many things 2013 will be remembered for, not least the miles of red tape that were imposed on Americans. It has been a very busy year indeed for regulators, who imposed new dictates on everything from the food we eat to the loans we obtain and the health insurance we buy.

Which are the worst? There are no objective standards to measure such things, but here is our take:

1. Failed health mandates. Finalized early in 2013, these rules — a key part of the Obamacare health insurance scheme — impose coverage requirements for individual health insurance policies. Required services for all policies range from maternity care (regardless of sex) to substance-abuse treatment to pediatric care (even for the childless). This mandate famously caused millions of Americans to lose their insurance policies, despite presidential assurances that “if you like your plan, you can keep your plan.” For that, it earns our recognition as the worst rule of 2013.

2. Finance for lawyers. The 900-plus page “Volcker Rule,” adopted by five separate financial regulatory agencies in early December, limits bank “proprietary” trading, meaning trades on their own accounts, rather than on behalf of clients. For three years, the rule was stalled as regulators tried to separate undesirable speculation from economically essential investment. It’s still doubtful they got it right. What it does do is create a boon for lawyers in the inevitable litigation to follow.

3. Mortgage micromanagement. The new Consumer Financial Protection Bureau went into high gear this year, issuing hundreds of pages of new rules restricting mortgage writing. Virtually every aspect of financing a home will be governed by rules set in Washington.

4. Diet dictates. The diet dictators at the Food and Drug Administration want to ban trans fats in food under the notion that any ingestion of any amount of this food additive is inherently unsafe. The cost of the ban is estimated at about $8 billion, in addition to Americans’ loss of some of their favorite foods.

5. Carbon inflation. In June, government regulators, not supported by economics or science, increased by a whopping 50 percent their estimates of the value of decreased carbon-dioxide emissions. This bloated estimate, while not in itself a regulation, will allow regulators to “justify” a host of new carbon dioxide restrictions, even if their benefits do not really outweigh the costs to the economy and consumers.

6. Pay-cap populism. The Securities and Exchange Commission in September proposed to require companies disclose the ratio of CEO compensation to the median earnings of all employees. This was among several dictates in the Dodd-Frank law with no purpose other than to stoke populist anger about wage “inequality.”

7. Billions for boilers. The Obama administration in January finalized a punishing set of regulations controlling emissions from some 17,000 boilers nationwide used to generate electricity and provide heat for factories. The Environmental Protection Agency estimated upfront costs of the rule at nearly $5 billion, although this is disputed as absurdly low by those affected.

8. Mail mandates. The U.S. Postal Service is hardly known for its efficiency. Part of the reason is that this government-owned enterprise operates under strict limits imposed by Congress. Thus, for instance, plans this spring to move to five-day-per-week delivery were blocked by congressional rules. No wonder the U.S. Postal Service is losing loads of money and putting taxpayers at risk.

9. Genetic-testing gag order. In early December, the Food and Drug Administration ordered a company called “23andMe” to stop marketing its home genetic-testing kits. There was nothing unsafe about the product; the FDA simply says that the tests might not be accurate and could prompt other, unnecessary, medical testing. Surely, that is a decision Americans can make for themselves.

10. Forced flacking for Christmas trees. In its latest version of the $1 trillion farm bill, the House approved a provision to require the Department of Agriculture to impose a tax of 15 cents on every fresh Christmas tree to fund a promotion campaign for the industry. This is a reincarnation of a program USDA wanted to impose in 2011, scotched as a result of a public outcry.

As active as regulators were in 2013, do not look for them to slow down next year. Already in the pipeline are dozens of new rules covering health care, finance, global warming, and more. It is anybody’s guess which will be on the 2014 list. The only safe bet is that consumers will lose choices and that all Americans will emerge with less freedom.

James L. Gattuso is senior research fellow for regulatory policy at the Roe Institute for Economic Policy Studies at the Heritage Foundation (heritage.org), where Diane Katz is a research fellow in regulatory policy.

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