The average American worked 187 days in 2001 to cover the costs of government operations, according to an annual report released Friday by Americans for Tax Reform. It took Americans until July 6 of this year to pay off the costs of taxes and regulations at all levels of government, bringing the total cost of government to $4.6 trillion for 2001, according to Americans for Tax Reform. Last year, Americans had paid off their debt by July 3. Americans for Tax Reform, which advocates tax and spending cuts, determines its Cost of Government Day by estimating the date, counting from Jan. 1, on which the average American worker has earned enough in gross income to pay off federal, state and local costs, including total spending and the cost of regulations. According to the report, the annual cost of government has risen steadily since 1989. Although federal, state, and local taxes ate up the largest chunk of taxpayers' money, federal regulations accounted for more than $800 billion. "Regulations are a hidden burden on taxpayers, but they are pervasive in number and pernicious in effect," said Tom Schatz, president of Citizens Against Government Waste, a nonprofit citizen advocacy group, during a news conference. Schatz said obsolete and redundant regulations, such as one created prior to refrigeration that oversees milk marketing orders, should be abolished. Wayne Crews, director of technology policy at the Cato Institute, agreed with Schatz and said major regulations issued by agencies should go back to Congress for review. "We need to bring accountability for major federal regulations back to Congress." According to the "Cost of Government Day" report for 2001, Americans spent 87 days paying off federal taxes, 41 days covering the cost of state and local taxes, and 35 days paying for federal regulations. Since 1996, federal agencies have had to provide cost-benefit analyses for proposed regulations estimated to cost more than $100 million. A draft report released in May by the Office of Management and Budget looked at the costs and benefits of 31 major federal regulations issued between April 1, 1999 and March 31, 2000 and concluded that the benefits of federal regulations tend to outweigh their costs. OMB estimated that the costs of the federal regulatory apparatus range from $82 million to $5 billion a year. The estimated benefits ranged from $50 million to $25 billion a year. Participants acknowledged that many federal regulations offer benefits to the public, but often at great cost. "As President Reagan said, government is the problem, not the solution," said Daniel Mitchell, a senior fellow in political economy at the Heritage Foundation. "Every time the government does something, there may be a benefit involved, but there is also cost." According to Ryan Horn, federal affairs manager at Americans for Tax Reform, the organization used a different system this year to calculate the cost of government. The group previously used statistics based on government spending to calculate how much taxpayers spent to sustain government operations, but switched to tax revenue numbers for its 2001 report. The new methodology accounts for certain statistical discrepancies between the 2001 report and reports from previous years, Horn said. For example, this year's report named July 3 as the cost of government day for 2000 based on the new methodology, although the actual 2000 report named June 16.
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