Buried Under the Regulatory Pile

Sep 15, 2011

6 Steps to Create Jobs

Imagine standing inside a giant hourglass with sand falling down on you. Little by little the small pile grows bigger. A few grains fall on top of a few other grains. You don't notice the heap until it towers over you.

Our regulatory system is like that. At the beginning, a few well-meaning, commonsense rules make our lives better. But over time the rules pile up. New laws and regulations get stacked on top of old ones. Layer upon layer upon layer of rules grow and grow until you end up with this, the cumulative number of federal rules from 1976-2009:

We have a situation where ignorance is the norm, because there are so many rules. "No one has the time to read all the rules," says Philip Howard, founder of Common Good, and organization working on legal reform. For all I know I could be breaking a federal regulation just by typing at my computer.

These rules touch every aspect of our lives:

  • FDA regulations stall American medical device companies from offering innovative technology, which encourages those firms to invest overseas where the regulatory climate is more efficient and predictable.
  • On the energy front the Wall Street Journal's Mary Anastasia O'Grady writes that the "watchdogs have spent the past three years throwing sand in the gears of the permitting process for exploration and exploitation on federal lands."
  • For power plants, new EPA rules like the Cross-State Air Pollution Rule and the proposed Utility Maximum Achievable Control Technology (MACT) rule threaten reliable electricity generating and as I noted on Monday, cost 500 Texans their jobs.
  • On the health care law that is being implemented, Gary Lawson of the Heritage Foundation notes, "Implementation of the Act will require many years and literally thousands of administrative regulations."
  • The Dodd-Frank financial regulation law "may cost consumers at least $20 billion annually, as banks and companies pass along costs."
This mass of rules makes businesses wary of investing and hiring workers. It's no wonder the public is negative towards new regulations. A Tarrance Group poll found 66% of voters think "increasing number of regulations have created uncertainty for large and small businesses" and 74% think businesses and consumers are overregulated.
 
How do we move forward and create a more inviting regulatory climate that encourages companies to take risks? The Chamber has a few suggestions in their six-step jobs plan:
  • The President should issue an executive order curbing any discretionary regulations that would have a substantial economic impact.
  • The administration should streamline and expedite the permitting process to get stalled projects moving.
  • Agencies should use cost-benefit analyses, sound science, and quality data when implementing rules.
  • Congress needs to use its legislative and oversight authority to make sure new regulations take into account their impact on economic growth and job creation.

We need to dig ourselves out of our regulatory sand dune to let America's job creators lift the economy.

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