A certain start to July

The first week of July saw a noticeable increase in both regulatory volume and overall effect. After a June in which weekly totals of significant regulations were in the single digits, there were 13 rulemakings with some kind of quantitative economic impact to kick off the new month. In addition, these rulemakings brought significant new costs and paperwork. Proposed regulations from the Financial Crimes Enforcement Network (FinCEN) and the Department of Health and Human Services (HHS) provided the week’s standouts. Across all rulemakings, agencies posted $3.3 billion in total costs and added 11.4 million hours to the annual paperwork burden.

KEY REGULATORY INFORMATION

• Suggested rules: 38
• Final Rules: 49
• 2024 Number of pages: 55,813
• Costs of 2024 final regulation: $1.24 trillion
• Cost of proposed rule for 2024: $43.8 billion

IMPORTANT REGULATORY ACTIONS

The week’s top rule was FinCEN’s proposed rule on “Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Programs.” The proposal “would require financial institutions to establish, implement, and maintain effective, risk-based, and reasonably designed AML/CFT programs with certain minimum components, including a mandatory risk assessment process.” Because the rulemaking is still in the proposed rulemaking phase, FinCEN currently has a range of potential costs based on various contingencies. However, in the section on paperwork burdens, the agency estimates that the administrative burden associated with meeting these new requirements will be 7.2 million hours and $765.8 million annually. Over the 3-year window in which the paperwork requirements are officially met, this would amount to about $2.2 billion in total costs.

The other notable action of the week was HHS’s proposed rule on “Medicare Program; Update to the Home Care Prospective Payment System Rate for Calendar Year 2025; HH Quality Reporting Program Requirements; Expanded HH Value-Based Purchasing Model Requirements; Update to the Home Intravenous Immunoglobulin Rate for Items and Services; and Other Medicare Rules.” As the long title suggests, the proposal provides the latest round of annual updates to various Medicare programs. While the rule’s primary impacts—as is often the case with many Medicare payment rules—take the form of adjustments to transfer payments, this rulemaking comes with its own significant administrative burden. HHS estimates that the proposed rule would involve about 3.3 million hours of paperwork and nearly $300 million in related costs per year (or about $900 million total over the entire 3-year paperwork window).

ADMINISTRATION TRACKING

As we’ve seen from executive orders and memos, the Biden administration will certainly provide plenty of contrast to the Trump administration on the regulatory front. And while there’s a general expectation that the current administration will seek a broad return to Obama-style regulatory action, there will also be areas where it will chart its own course. Because AAF RegRodeo data goes back to 2005, it can provide weekly updates on how key trends in President Biden’s regulatory history align with those of his last two predecessors. The table below shows the cumulative totals of final regulations that contain a quantitative economic impact from each administration to that point, on their respective dates.Because the main action last week was on the proposed side of the ledger, there was little change in the Biden administration’s final rule numbers so far. The week’s most significant final rule was the Environmental Protection Agency’s rule on emissions standards for coke ovens, which has a total cost of about $41 million. There was essentially no change in the Obama-era number for the other two administrations, but the Trump administration saw nearly $1.2 billion in cost reductions. The primary reason for this cost decline was a set of rules governing defense contractor practices.

TOTAL LOADS

Since January 1, the federal government has released data on total net costs of $1.29 trillion (including $1.24 trillion in new costs resulting from the final rule) and 64.7 million hours of net bureaucratic burden increase per year (including 21.4 million hours resulting from the final rule).