The Federal Regulatory Monster and What’s Needed to Rein It In

By SBE Council at 23 April, 2026, 2:21 pm

by Raymond J. Keating –

The Competitive Enterprise Institute recently released the latest edition of its annual Ten Thousand Commandments report, authored by Wayne Crews, which documents the federal regulatory burden imposed on American businesses and citizens. Crews said, “Government regulations continue to cost Americans more than $2 trillion annually, despite efforts by the Trump administration to find ways to deregulate.”

It was reported that the costs of federal regulations to the U.S. economy was at least $2.153 trillion annually, averaging $15,859 cost per household. That translates into the federal government consuming “the equivalent of a third of the U.S. economy when the cost of regulations and taxes is combined.”

It also is noted in the CEI study, “An October 2023 National Association of Manufacturers (NAM) report models regulatory compliance at $3.079 trillion annually. Other studies imply far higher costs. This report’s conservative placeholder is intended to induce Congress to enforce compliance with the Regulatory Right-to-Know Act’s requirement for an official aggregate estimate.”

Crews correctly explains, “Just as consumers shoulder much of the corporate income tax and tariff burden, regulatory compliance costs and mandates borne by businesses percolate through the economy and materialize as higher prices, lost jobs, and lower output. Off-budget regulatory costs can drag down the economy, just as over-spending can.”

As for Trump administration efforts, it was noted that “executive actions restored some cost-conscious regulatory review principles, emphasized energy production and permitting, put an effective freeze on most major new regulatory undertakings, and imposed rescissions and delays of existing regulations.” At the same time, though, the administration has “sought and imposed subsidies, tariffs, and interventions that threaten to eclipse deregulatory gains.”

On the small business front, there was a bit of good news.

It was pointed out: “Final rules affecting small business as reported in the 2025 Federal Register fell to 599, down from 770 under Biden in 2024. Biden’s four years averaged 846 rules annually affecting small business, compared with 694 for Obama and 701 during Trump’s first term. Deregulatory measures are prominent in both Trump terms.”

What’s needed to rein in this regulatory monster?

Crews provides a sound agenda: “Congress needs to reclaim its responsibilities. It can do this by over-turning vague and broad statutes that have enabled the modern administrative state that operates almost without checks and balances from the other branches of government. At the very least, Congress should approve costly or controversial agency rules before they become binding… Other reforms include regulatory sunsetting and budgeting; a regulatory reduction commission; and the limitation, streamlining, and inventorying of guidance documents to prohibit the rise of largely untraceable rule equivalents that can substitute for conventional rulemaking. Annual regulatory transparency report cards are needed to document and keep tabs on progress, as the administrative state has great resilience.”

These are the kinds of measures that would have lasting benefits for American entrepreneurs, businesses, investors and workers – far more so than executive orders swinging back and forth from administration to administration. Congress needs to step up and reclaim its authority in our system of separation of powers, and checks and balances.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of “The Weekly Economist” book series, and 10 Points from Walt Disney on Entrepreneurship.