Wednesday, 31 August 2011

Obama’s Seven New Regulations Would Cost U.S. Economy Billions

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ObamaPresident Obama sent a letter to House Speaker John Boehner (R-Ohio) Tuesday detailing seven new regulations that would each cost the U.S. economy more than $1 billion annually. With regulatory costs for American businesses of at least $38 billion per year and compliance costs of $100 billion per year, the seven proposed regulations would target transportation and the environment.

Boehner wrote the President last Friday, "The economy cannot withstand the barrage of major new federal regulations planned by the administration." He noted that the Obama Administration’s regulatory agenda counters Obama’s proclaimed motive to reduce burdens on American businesses. Boehner further noted that during the President’s tenure 219 rules have been proposed, each projected to cost at least $100 million.

Obama’s regulatory proposal includes four rules from the Environmental Protection Agency (EPA) and three from the Department of Transportation (DOT). An air-quality standards rule alone could cost between $19 billion and $90 billion per year for the U.S. economy.

Boehner requested accounting numbers for the seven proposed rules and they were provided in Obama’s response letter:

• Reconsideration of the 2008 Ozone National Ambient Air Quality Standards. Estimated cost: $19-$90 billion.

• National Emission Standards for Hazardous Air Pollutants for Coal- and Oil-Fired Electric Utility Steam Generating Units. Estimated cost: $10 billion.

• National Emission Standards for Hazardous Air Pollutants for Major Source Industrial, Commercial & Institutional Boilers and Process Heaters. Estimated cost: $3 billion.

• Standards for the Management of Coal Combustion Residuals Generated by Commercial Electric Power Producers. Estimated cost: $0.6-$1.5 billion.

• Federal Motor Vehicle Safety Standard No. 111, Rearview Mirrors. Estimated cost: $2 billion.

• Electronic On-Board Recorders and Hours of Service Supporting Documents. Estimated cost: $2 billion.

• Hours of Service. Estimated cost: $1 billion.

The Obama administration has long fought Republicans and industry leaders over the regulatory debacle, and one group in particular is the U.S. Chamber of Commerce — a vehement opponent to the regulatory burdens of today’s political environment. Bill Kovacs, the Chamber’s vice president for technology, environment, and regulatory affairs, said Obama’s claims to ease regulatory burdens is "disingenuous."

The Competitive Enterprise Institute, a free-market think tank, conducted its own study on regulations in the United States and identified 339 "economically significant" rules (i.e., those costing at least $100 million) during the last two years under Bush, compared to 408 such rules in the first two years under Obama. Hundreds of more rules will be streaming through the pipeline, as a flood of new regulatory burdens stem from the EPA, ObamaCare, the Dodd-Frank financial reform law, and the Department of Labor. A rule to regulate ozone levels is projected to cost nearly $1 trillion, which according to Sen. John Barrasso (R-Wy.), is the "single most expensive environmental regulation in history."

"The combined cost of these seven new regulatory actions alone could be more than $100 billion, according to the information released by the White House today, [and t]hese costs will be felt by the American people in the form of fewer jobs and slower economic growth," Boehner said in response to the President’s proposal. "At a time like this, with our economy struggling to create jobs, it’s misguided for the federal government to be imposing so many new rules with such enormous costs, even when some of those rules may be well-intentioned."

On Monday, House Majority Leader Eric Cantor (R-Va.) unveiled a GOP plan to target 10 regulations in an effort to ease regulatory burdens on small businesses. The four EPA regulations proposed by Obama already had a home on the Republicans’ target list. Other items include a cement regulation, a rollback of various healthcare regulations, and two labor regulations from the National Labor Relations Board.

"I think the administration has ... already demonstrated that it is not interested in focusing on private-sector growth," Cantor said on Fox News. "What our list demonstrates is: Washington now has gotten in the way, and we’ve got to make it easier, finally, for small business people to grow."

President Obama offers an amusing rebuttal to GOP opposition, as he claims his administration’s regulatory agenda contains "merely a list of rules that are under general contemplation" and "merely proposed" and "includes a large number of rules that are in a highly preliminary state, with no reliable costs estimate."

The Wall Street Journal made an attempt to unravel the President’s skewed form of logic:

In other words, regulations that the Administration plans to issue don't count. The President's health-care plan doesn't affect hiring because it doesn't really kick in until 2014, and the Dodd-Frank financial reregulation isn't a drag on lending because no one knows what dozens of agencies may do, except that it will be very expensive.

"I agree that it is extremely important to minimize regulatory burdens and to avoid unjustified regulatory costs, particularly in this difficult economic period," Obama wrote Boehner. "I have taken a number of steps to achieve those goals."

Some might say that attempting to "justify" tens of billions of dollars in any new regulations, particularly during this "difficult economic period," is a burden in itself — and one that is quite frankly, impossible

Photo: AP Images

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