Reducing Regulatory Burdens & Stimulating Jobs

Reducing Regulatory BurdenThe U.S. House continues to focus on numerous federal regulations deemed as “overburdensome” and that if ended, may stimulate the economy and create jobs. Speaker of the House John Boehner (R-OH) has sent a letter to President Obama requesting a list of all proposed regulations that are estimated to have an economic impact exceeding $1 billion.

“Flight to Safety” in the Markets

In addition, in mid-August US House Majority Leader Eric Cantor (R-VA) wrote a memo to House Republican colleagues explaining, “It is clear that there is a ‘flight to safety’ in the markets… To be clear, there is no single explanation for what is causing this flight to safety. Investors and businesses alike are clearly concerned about a double-dip recession, the sovereign debt problems (and their impact on banks) in Europe, and, yes, our own debt crisis here at home. But it is also the case that policy uncertainty in Washington is contributing to the unease about the economy and the future.”

Job Destroying Regulations

Cantor followed this message up with another memo in early September and this time was more specific in identifying ten “job-destroying regulations” that cause a “cloud of uncertainty hanging over small and large employers alike.”  He also mentioned that during the fall and winter, the U.S. House will pursue tax relief designed to help American employers create jobs. In particular Cantor and Ways and Means Chairman Dave Camp (R-MI) have been working on a proposal to allow small businesses to deduct 20 percent of their income.

Of course, GOP plans will be met with resistance from Senate Democrats. In his speech to the Joint Session of Congress, President Obama stressed he would help in a balanced, common sense approach to government regulations.  For instance, the President praised Congress for passage of reforms “that will speed up the outdated patent process, so that entrepreneurs can turn a new idea into a new business as quickly as possible. That’s the kind of action we need.”  The President also agreed “that we can’t afford wasteful spending, and I’ll work with Congress, to root it out.”

And the Winner is… the EPA!

In June, the White House Office of Management and Budget (OMB) released a report to Congress on the “Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities.” The Report summarizes estimates by Federal regulatory agencies of the monetized benefits of major regulations over the last ten years. Rules with the highest benefits and the highest costs, by far, come from the Environmental Protection Agency and in particular its Office of Air. More specifically, EPA rules account for 62 to 84%of the monetized benefits and 46 to 53 % of the costs. The rules that aim to improve air quality account for 95 to 97 percent of the benefits of EPA rules.

Because of this renewed focus The President said, “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. “

Race to the Top?

But the  President stopped there and pleaded for a cautious, balanced approach to government regulations stating, “But what we can’t do — what I will not do — is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades…. We shouldn’t be in a race to the bottom, where we try to offer the cheapest labor and the worst pollution standards. America should be in a race to the top. And I believe we can win that race.”

If the 15 Federal government agencies adhere to OMB’s guidance in the future, it is possible to strike a balanced, common-sense approach between government safeguards and allowing U.S. businesses to prosper.  Consider, in America’s favorite pastime we can strike an acceptable balance of 4 umpires to “regulate” a baseball game to insure that all players participate fairly and by the rules of the game.  The most number of players that can be on the field at the same time are 13 players (9 defenders, 3 base runners, 1 batter).  That’s a ratio where just under one-third of all people involved in the game are making sure it is “regulated” appropriately.  More interesting, when the stakes get higher during the playoffs, 2 more umpires are added; one each on the foul line in the outfield.  For those counting, when the stakes get higher, the ratio of those regulating the game increases to nearly one-half (46%).

Helping Business

If Cantor and Camp get their initiative passed, their new proposal will allow small businesses to deduct 20% of their income, a huge benefit to keeping small businesses afloat during this economic drought. Any new regulations need to strike a balance between affordable labor, ecological safeties and economic growth.

If we can achieve a balanced, common-sense approach to appropriate regulations in America’s favorite pastime, we can figure it out between government and industry.

Cansler Consulting is an experienced lobbying firm in budgetingagricultural, rural healthcare, and energy policies and through our Congressional relationships we can help you influence the policy makers on Capitol Hill. You can contact us at info@canslerconsulting.com or at (202) 220-3150.

Tim Cansler
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