Politics & Policy

Obama and the Regulators

They are imposing huge burdens on business.

On Tuesday, the Obama administration announced the results of an eight-month government-wide review designed to reduce the regulatory impact on businesses. Every federal department was ordered to put forward a plan to do away with red tape. Now that those plans have been unveiled, the administration has promised an additional round of reviews, a process that White House officials claim is “likely” to save at least $10 billion over five years and create an unspecified number of jobs.

Members of the business community met this effort with the equivalent of an obligatory golf clap, as one applauds a beleaguered player who finally taps in for triple-bogey. “The administration’s findings and determinations, on their own, are a worthy effort at making technical changes to the regulatory process,” Bill Kovacs, a senior vice president at the Chamber of Commerce, said in a statement. “But the results of this lookback will not have a material impact on the real regulatory burden facing businesses today.”

Indeed, even if that $10 billion estimate holds true, it would cover just a fraction of the $65 billion in total costs imposed by the nearly 350 new federal regulations introduced since beginning of this year alone, according to an analysis by Sen. John Barrasso (R., Wyo.). And those are only the rules for which the administration deigned to analyze the economic consequences before implementing them. Hundreds more have been put in place without regard to cost or the impact on jobs.

That is why Republicans are gearing up to challenge President Obama, who will supposedly unveil — in speech format, no less — a “very specific” jobs plan when Congress returns in September, on the issue of government overregulation and its damaging impact on jobs. “Speeches and editorials are not enough to help real job creators in America — small business owners — create middle-class jobs,” Cantor said in a statement following the release of the regulatory review. “Action is needed — which is why we must remove onerous federal regulations that are redundant, harmful to small businesses, and impede private sector investment and job creation.”

GOP lawmakers already have a number of bills in the pipeline that would address the issue. Senator Barrasso, for example, has introduced legislation that would simply force federal agencies to consider the impact that new regulations would have on jobs. Sen. Ron Johnson (R., Wis.) has proposed a moratorium on major new regulation until the unemployment rate returns to 7.7 percent — the rate when Obama took office.

In the House, where the GOP can actually set the legislative agenda, Republicans are poised to roll out measures that would eliminate some of the more onerous regulations imposed by the administration. “Next month, the House will continue our jobs focus and pursue a legislative agenda that boosts economic growth through reducing the regulatory and tax burden,” Cantor said. “We will make sure that Washington policies are less restrictive to businesses small and large by requiring a congressional review and approval of any proposed federal government regulation that will have a significant impact on the economy.”

Here’s at look at some of the various federal agencies that are ripe for a regulatory overhaul:


Environmental Protection Agency. Ever since Congress rejected his business-crippling “cap and trade” venture, President Obama has simply sought to impose his agenda anyway through the EPA, most blatantly through the creation of new ozone-pollution standards, at an estimated cost of nearly $1 trillion. The administration has wisely decided to delay the imposition of these new standards, but opponents argue that they ought to be scrapped altogether to ease the collective anxiety of the business community.

Furthermore, the EPA and the Department of Transportation have jointly conceived new regulations that would — for the first time ever — require stricter emissions and mileage standards for medium and heavy-duty trucks. These new standards would affect everything from delivery vans to full-size pickups and buses. Barrasso estimated that the new rules would cost consumers an additional $1,000 per vehicle, at a total cost of more than $8 billion. Tighter controls on pollution caused by cement and “coarse particulate material” (i.e., dust) are also in the works, promising to drive up costs and further impede employers’ ability to create jobs.

In its recent regulatory review, the EPA stated as its “central goal” the reduction of “unjustified burdens and costs.” But as its own assistant administrator, Mathy Stanislaus, has acknowledged, the EPA does not typically analyze the impact that a proposed regulation will have on jobs. In fact, the EPA has even suggested that new regulations can have a positive impact on job growth. “In periods of high unemployment, an increase in labor demand due to regulation may have a stimulative effect that results in a net increase in overall employment,” the agency wrote in February.

National Labor Relations Board. Just as Obama has sought to impose his environmental agenda by executive fiat through the EPA, so he has sought to appease Big Labor following the defeat of the so-called card-check legislation, which would have tipped the scales dramatically in favor of labor unions by, among other things, eliminating the secret ballot in elections determining union representation.

As it happens, the NLRB is currently trying to change the rules for union-representation elections on its own by, for example, allowing for “ambush” elections that would give employers as little as ten days to present their case to employees. Furthermore, the NLRB is poised to issue a decision that would allow for the creation of micro-units or “mini-unions” within workplaces, forcing employers to negotiate with multiple parties, thus putting an added strain on time and resources.

This comes on top of the NLRB’s infamous ruling against Boeing, which recently decided to open a new plant in right-to-work state South Carolina in part because of its frustration with frequent union strikes at its primary plant in Washington. Boeing, having already created thousands of jobs in South Carolina, must now spend millions in court defending itself against the NLRB’s charge that its decision was an unlawful “retaliation” against the unionized workforce at the Washington plant.

National Mediation Board. Another onerous rule that is certain to come up shortly after Congress returns from recess is one that was recently introduced by the NMB stating that employee referendums on unionization can be approved by a simple majority of those voting, as opposed to the old rule requiring that a majority of all affected employees vote in favor of unionization (i.e., a non-vote counts as a vote against). In particular, the airline unions (and their Democratic allies) have their eyes set on Delta, the only major carrier that has yet to be unionized. Delta employees have repeatedly voted against unionization, but the new rule will make it much harder for them to do so.

Republicans have already attempted to strike down this rule in a recent bill authorizing funding for the Federal Aviation Administration, which underwent a temporary shutdown last month when the Senate refused to take up the House bill and adjourned for the recess. Lawmakers eventually approved a short-term funding extension through September 16, so expect this same debate to resurface soon enough.

These are but a smattering of the restrictive federal rules and regulations that are imposing unnecessary burdens on businesses already struggling to weather the ongoing recession. Meanwhile, regulatory agencies have been faring quite well, seeing their budgets (currently about $54 billion) increase by 16 percent since Obama took office.

No doubt the president plans to talk a big game on job creation when he returns from his vacation in Martha’s Vineyard. Republicans should, and appear ready to, offer him plenty of chances to put his money where his mouth is.

— Andrew Stiles is the Franklin Center’s 2011 Thomas L. Rhodes Journalism Fellow.

Andrew StilesAndrew Stiles is a political reporter for National Review Online. He previously worked at the Washington Free Beacon, and was an intern at The Hill newspaper. Stiles is a 2009 ...


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