When it comes to regulation, rhetoric doesn’t match reality

Listening to Barack Obama’s recent speech on the economy in a policy vacuum, you could get the idea the president is pretty reasonable on the issue of regulation. As is the case so often in the political world, rhetoric doesn’t match reality.

Obama said, “I agree that there are some rules and regulations that do put an unnecessary burden on businesses at a time when they can least afford it. That’s why I ordered a review of all government regulations.

So far, we’ve identified over 500 reforms, which will save billions of dollars over the next few years. We should have no more regulation than the health, safety and security of the American people require. Every rule should meet that common-sense test.”

Raymond Keating

Sounds great, right? Unfortunately, the actual Obama record on regulation has been abysmal.

In the 2011 edition of “Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State,” Clyde Wayne Crews Jr. correctly noted, “Federal environmental, safety and health and economic regulations cost hundreds of billions — perhaps trillions — of dollars every year over and above the costs of the official federal outlays that now dominate the policy debate.” As highlighted in this report capturing federal regulatory activity, Crews found the following that should be noted by all concerned about the costs of regulation and the negative effects on business, investment, the economy and job creation:

The 2010 Federal Register stands at a record-high 81,405 pages.

Federal Register pages devoted specifically to final rules rose 20 percent, from 20,782 in 2009 to 24,914.

In 2010, agencies issued 3,573 final rules, compared with 3,503 in 2009. Notably, the number of proposed rules increased even more than the number of final rules, from 2,044 in 2009 to 2,439 in 2010, an increase of 19.3 percent.

According to the 2010 “Regulatory Plan and the Unified Agenda of Federal Regulatory and Deregulatory Actions” in the Federal Register, which lists federal regulatory actions at various stages of implementation, 58 federal departments, agencies and commissions have

4,225 regulations in play at various stages of implementation, an increase of 4.5 percent.

Of the 4,225 regulations now in the pipeline, 224 are “economically significant” rules with at least $100 million in economic effects.

“Economically significant” rules increased 22 percent over 2009.

Of the 4,226 regulations now in the works, 845 affect small business, an 11.5 percent increase over 758 in 2009.

The number of final “major rule” reports issued by agencies and reviewed by the Government Accountability Office (GAO) has surged. The

99 rules of 2010 represent the highest number since this tabulation began. Five years ago, there were 56 such reports.

This trend hardly reflects a federal government concerned about regulatory burdens placed on entrepreneurs, businesses, workers, consumers and the economy. It’s hard to see how such a mounting burden of regulation can be described as common sense.

Of course, any review of regulations with an eye towards rationalizing the process is welcome. In addition, the recent announcement by the President that he has ordered the EPA to withdraw misguided ozone regulations that would have raised costs for businesses and consumers, thereby reducing economic growth and jobs, was a positive.

But the president’s overall review effort has been slow and grossly underwhelming, especially compared with the massive regulations favored and imposed by the president.

ObamaCare not only promises to be incredibly costly in terms of more government spending and increased taxes, but the regulatory costs will be monumental as well, including an individual mandate to purchase health insurance; the “play or pay” insurance mandate on businesses; increased rules and mandates on insurers that will raise health insurance cost; and government-run state insurance exchanges, which will serve specifically as vehicles for imposing rules and regulations.

The financial reform effort passed by Congress and signed by President Obama is all about increased regulation of private financial institutions. The inevitable result, as we are already seeing, will be reduced access to credit while doing nothing to redress the underlying public policy agenda that caused the housing and credit mess, namely, assorted government entities and policies that replaced sound economics with political preferences in determining home mortgages.

For good measure, the EPA continues to reach beyond its statutory powers to push ahead with regulations that would impose carbon dioxide emissions caps on the economy, while Congress, at various times led by both parties, has steadfastly refused to take such a step.

Unfortunately, the list goes on, the point being the White House has no serious interest in providing regulatory relief. Despite rhetoric saying otherwise, the Obama administration ranks as one of the all-time regulators in U.S. history.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. Reach him through the Web site at www.sbecouncil.org.