Obama's Boom In Job-Killing Jobs

 

By Ramesh Ponnuru
NYPost.com

President Obama can take credit for a boom in at least one economic sector: Since he took office, employment has surged 13 percent at federal regulatory agencies.

The regulators’ budgets are up 16 percent, according to a May report by Washington University and George Washington University. That’s before some major administration regulatory initiatives -- the financial-reform bill and the health-care overhaul -- are fully implemented.

Obama understands that a reputation for regulatory hyperactivity amid a weak economy wouldn’t help his re-election. In January, he promised “a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive.” That review led to some modest improvements: The Environmental Protection Agency pulled back a rule that would have treated dairy spills on farms like oil spills.

Overall, though, the regulatory burden is growing.

The new health-care law will force major fast-food chains to redo their signs to include calorie information -- a change that one CEO said would cost his company as much as building 1 1/2 new restaurants.

The EPA is moving ahead with plans to tighten restrictions on ozone. Hundreds of counties don’t now meet the standards; companies investing in them will face new obstacles. The EPA estimates the annual cost of the new rules will be at least $19 billion. The agency also plans directives on boilers, which manufacturers say would impose $14 billion in capital costs and make electricity service more prone to interruptions and more expensive.

Reviewing Government Accountability Office data, two Heritage Foundation analysts concluded, “No other president has burdened businesses and individuals with a higher number and larger cost of regulations in a comparable time period.” President George W. Bush, they note, was in his third year before new compliance costs hit $4 billion; “President Obama achieved the same in 12 months.”

Regulations on the books provide some benefits, such as improved health and a cleaner environment; many proposed rules would presumably also yield positives. But there’s good reason to think that federal government has gone too far.

For one thing, most costs of regulation -- the Small Business Administration estimates that compliance costs in 2008 were $1.75 trillion -- don’t appear in the budget. If legislators are lax when it comes to on-budget spending, how much freer are they likely to be with outlays that don’t show up in the deficit figures?

Nor can we assume that industry will check the growth of regulation, because large companies sometimes welcome regulations that hobble smaller competitors.

Republicans on Capitol Hill are promoting two bills to turn back the regulatory tide. One, the “REINS Act,” would require Congress to approve any new rule with major economic effects.

Sen. Ron Johnson (R-Wis.), has introduced a bill to declare a moratorium on major regulations until the unemployment rate drops to 7.7 percent -- that is, until it goes lower than it was when Obama took office. (The president could waive the rule in national emergencies.)

“I’m not anti-government,” Johnson told me. “We do need some regulation. The purpose of my piece of legislation is to call a halt to the issuance of new regulations until we get our economy back on its feet.”

Johnson is, of course, making a partisan point by choosing an unemployment target tied to Obama’s inauguration. But the underlying concept is attractive. A permanent ban on new regulation wouldn’t make sense. Ultimately, we need a rational structure where some rules go and others stay. Existing executive orders that require agencies to undertake cost-benefit analyses before issuing regulations should be codified in legislation and strengthened to require that the analysis be published before the regulation takes effect.

But why not sidestep the debate over the merits of particular rules and the shape of a new system for now, and just agree that this isn’t the time to pile burdens on the economy? If we’ve gotten by this long without whatever safety and health benefits these regulations may bring, surely we can go a few more years without them. Congress would retain the power to enact laws should needs arise that don’t qualify as emergencies. But regulatory creep would halt.

Obama has challenged Congress to put country before politics. Perhaps Congress and the president should try putting recovery before regulation.

Ramesh Ponnuru is a senior editor at National Review. © 2011 Bloomberg News