Regulations

OBAMA’S MALAISE: Rampant Regs Stymie Economic Recovery

LCT Staff
Posted on July 21, 2010

The Obama Administration’s ideological obsession with issuing complicated and costly rules on businesses is derailing job creation, prosperity, and economic security.

WASHINGTON, D.C. — The avalanche of new and proposed rules and regulations introduced by the Obama Administration and its federal agencies is creating great uncertainty among businesses and stifling job creation, according to business owners and academia attending a July 8 forum hosted by the National Chamber Foundation (NCF), the U.S. Chamber’s public policy think tank.

“We’re not hiring because we don’t know what’s going to happen,” said James Vitrano, general counsel and vice president of corporate affairs at New Orleans-based Blessey Marine Services Inc. This year was the first that Blessey’s employees did not receive raises, noted Vitrano, speaking as a panelist at the NCF event. The company is also reviewing its employee health care coverage in light of the new health care law.

Vitrano says that two departments at Blessey Marine Services are devoted entirely to scouring the Federal Register notice for possible regulations. He estimates that the 700-employee company faces $40 million in additional costs due to regulations from the EPA, Coast Guard, and EEOC.

“The Chamber has an initiative calling for business owners to ‘Dream Big.’ The biggest threat to dreaming big is that nasty alarm clock in a hotel that goes off without warning at 3:40 AM,” Vitrano said. “That alarm clock represents every administrative regulatory agency in this country. It wakes up my CEO who is dreaming big. Congress is the hotel manager who won’t rein in those agencies that are keeping us awake.”

The ideal solution would be to reduce regulations, Vitrano said. But at the very least, small business owners should have some recourse to fight regulations, and the federal government should be held more accountable for the consequences of burdensome regulations.

Administrations of both parties are responsible for the growing regulatory burden, says Christopher DeMuth, a leading scholar at the American Enterprise Institute (AEI) and a panelist at the regulatory forum.

President Bush expanded his regulatory reach in response to the Enron scandal, the Sept. 11, 2001 terrorist attacks, and the financial crisis that began to take hold in 2008, DeMuth noted.

The Obama Administration continues the trend of reactionary regulations, DeMuth said, and is “enthusiastic and unconflicted” in its pursuit.

“The trend of regulation growth is one that should worry all public-spirited citizens,” said DeMuth, who released a paper, Contemporary Conservatism and Government Regulation, at the event.

Increasing regulation is every bit as debilitating as tax increases but is more acceptable to politicians and the general public, added Ted Gayer, co-director of economic studies at the Brookings Institution. “It’s a paradox — everybody hates taxes but are ok with regulations and subsidies,” he said.

U.S. CHAMBER OF COMMERCE WEB SITE

Source: Free Enterprise newsletter, U.S. Chamber Of Commerce

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