We finally have an update on what the federal government thinks about its paperwork.
Federal reports are chronically late.
It had been two years since the White House Office of Management and Budget released its annual federal paperwork burden survey, the Information Collection Budget of the U.S. Government, when the 2015 and 2016 editions finally appeared in December.
In another recent example, the White House regulatory benefit/cost report to Congress, which appeared the day before Christmas Eve 2016, was the latest ever by two months.
But how nice to see the official publication, and the commentary, at last!
In its new 2016 Information Collection Budget of the U.S. Government (encompassing fiscal year 2015 data), the Office of Management and Budget, estimates that 9.778 billion hours was required to complete the federal paperwork requirements (from 22 executive departments and six independent agencies that have been historically subject to survey, see p. 7).
9.7 billion hours of paperwork took up the equivalent of 13,953 full human lifetimes.
The vast bulk of that, 7.357 billion hours, is attributable to the Treasury Department (lots of tax compliance).
Some compliance hours attributable to the Dodd-Frank law and its affiliated agency paperwork and certain other federal activities are not included in the primary Information Collection Budget tally. Rather, they are exiled to an appendix on the last page of the ICB, along with a few other agencies whose compliance-hours exceed a one-million-hours threshold.
But at least OMB includes them, recognizing their significance. If we include these eight agencies, another 87 million hours get added to the tally (see p. 49). Expect growth in these categories, and their playing a greater role in future editions of the ICB unless regulatory liberalization occurs.
Can You Imagine?
How does one visualize 9.778 billion hours? Few can, but there’s this. An 80-year human lifespan is 29,200 days. That’s 700,800 hours, as this animation shows.
That means the December 2016 OMB report’s 9.778 billion hours of paperwork took up the equivalent of 13,953 full human lifetimes. That’s up from the 13,488 in fiscal year 2013 depicted in the last edition of this report.
I didn’t include here the hours posted in the appendix, and I guess I’m being generous in saying everyone lives 80 years (it’s 78.8 years on average), which would make paperwork “cost” more lives. And this is paperwork only, not other compliance costs, tasks, duties, restrictions, directives, and mandates. Presumably, those subject to paperwork would say the federal government underestimates it.
Assuming $40 an hour, we’re looking at over $391 billion in paper-shuffling costs alone.
How do you like to spend your finite 700,000 hours? Probably not on paperwork.
The OMB does not provide annual cost estimates for of all these hours, but did allow in a prior edition (2011) of the Information Collection Budget that “if each hour [then 8.783 billion] is valued at $20, the monetary equivalent would be $176 billion.” OMB does present the cost savings some agencies claim, in a “Burden Reduction Initiatives” section.
The Progressive Policy Institute echoed the same $20 cost figure in When Paperwork Attacks! Five Ideas for Smarter Government, noting that the figure would, at that time, position “paperwork” at number five in the Fortune 500 based on “revenues” equivalence. A corresponding cost figure for the newer 2016 report would be $195 billion (9.778 billion hours times $20).
With respect to OMB’s dollar cost number, one must wonder when was the last time a lawyer or compliance officer was hired for $20 per hour. An earlier installment of this roundup a couple of years back noted the salaries of compliance officers in the banking field and referred to environmental compliance complexities and the high salaries in that field. If one assumes $40 an hour, we’re looking at over $391 billion in paper-shuffling costs alone, let alone compliance with and economic/social impacts of the underlying rules and regulations generating the paper in the first place.
Other hourly labor cost estimates give extra perspective. The National Federation of Independent Business conducts a survey of members with respect to paperwork compliance costs, where numbers vary depending upon the type of requirement. Meanwhile, the Bureau of Labor Statistics notes the following mean hourly wages for basic categories one might regard as relevant in keeping up with complex federal paperwork. All exceed the $20 floated by OMB.
I’ve noted that tax compliance accounts for most paperwork. Later I’ll take a look at that, which is important since tax reform is a major priority of the 115th Congress.
Reprinted from Competitive Enterprise Institute