If the announcement is more than mere rhetoric, it would amount to a dramatic policy conversion.
During its first two years, the Obama White House ranked among the most aggressive regulators in decades — since the 1970s, perhaps since the 1930s.
But on Jan,18, President Barack Obama ordered federal agencies to review regulations to see if they’re hampering business.
The executive order and presidential memorandums focus on implementation of laws already on the books meant to serve as checks for small businesses when it comes to government regulation, greater transparency and information regarding regulatory compliance initiatives within the agencies, regulatory streamlining and the identification of outmoded and duplicative regulation and reducing the burdens of regulation.
The question: Is the president a born-again deregulator or is this just a public relations effort with an eye on the 2012 elections?
The problem of regulatory costs hurting business, entrepreneurship and investment is undeniable. The latest research on this from the U.S. Small Business Administration Office of Advocacy found: “Small businesses, defined as firms employing fewer than 20 employees, bear the largest burden of federal regulations. As of 2008, small businesses face an annual regulatory cost of $10,585 per employee, which is
36 percent higher than the regulatory cost facing large firms (defined as firms with 500 or more employees).”
The need for a comprehensive, substantive review of regulations, and weeding out those that are far too costly, is clear, and the apparent recognition of at least this possibility by the Obama administration is a plus.
However, big questions swirl around the president’s initiative — as reported by various media.
First, a lack of specificity raises the possibility the review will be merely cosmetic. Second, subsequent word from administration officials indicated that the review would be limited.
The Wall Street Journal reported that the White House indicated that ObamaCare, financial regulation and steps by the U.S. Environmental Protection Agency toward regulating carbon dioxide emissions would pass muster and remain unaffected. If that turns out to be the case, then this truly would be nothing more than a case of PR over substance given the harsh regulatory realities of these efforts in terms of hurting entrepreneurship, investment, economic growth and jobs.
Third, while the Obama White House was quick to regulate during its first two years, it seems this effort will take months to get under way in the various agencies. Regulatory costs weigh heavily on business and the economy. Quick action is needed in rolling back costly, outmoded regulations.
Fortunately, the White House will be getting pushed and helped by Congress. U.S. Rep. Darrell Issa, R-Calif, the new chairman of the House Committee on Oversight and Government Reform, has begun the process of identifying existing and proposed regulations serving as obstacles to entrepreneurship, small business growth and economic recovery.
In response to the president’s announcement, Issa was positive and encouraging: “I applaud President Obama for joining what must be an effort that stretches beyond ideological entrenchments to identify the regulatory impediments that have prevented real and sustained job growth in the private sector. The anti-business policies of the past have hurt job creators, small and large. It’s in the interest of every
American that we create a modern, regulatory environment that fosters economic growth and makes U.S. companies globally competitive.
I look forward to providing the president with insights gained from our current effort to hear directly from job creators about what they perceive as barriers standing in the way of their ability to create jobs.”
Let’s hope that with the help of members of Congress such as Rep. Issa, the president’s effort will turn out to be substantive and comprehensive, and thereby, beneficial to the small businesses that are the innovators, job creators and sources of growth in our economy.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council, an advocacy, research and training organization based in Washington, D.C., and established to protect small businesses and promote entrepreneurship. Reach Keating through the website at www.sbecouncil.org.