Business Advocates Skeptical of Regulatory Review
August 24, 2011
The White House on Tuesday released over two dozen finalized plans—more than 800 pages of text—for streamlining regulations in government agencies.
But congressional Republicans and business advocates say the effort doesn’t go far enough. They fear the continued implementation of new regulations will prove costly for businesses and hinder economic growth at a vulnerable time.
The plans are the culmination of an executive order issued in January mandating that agencies review regulations and eliminate any burdensome rules. Preliminary drafts of the changes were released in May. The more than 500 proposed changes released by 26 federal agencies on Tuesday followed a months-long public comment period.
The plans include a Health and Human Services Department rule that would allow doctors credentialed at one hospital to practice at distant hospitals through telemedicine, a Labor Department rule that would simplify and improve hazard warnings for workers, and an effort by the Internal Revenue Service to reduce annual paperwork burdens.
The finalized rules will save more than $4 billion over the next five years, Office of Information and Regulatory Affairs Administrator Cass Sunstein said in a conference call on Tuesday. Including the reforms that have been monetized but not yet finalized, he expects the review will save over $10 billion during the same time period.
The Obama administration has undertaken a broader enforcement effort in its approach to regulations than the previous administration, said David French, Senior Vice President for Government Relations at the National Retail Federation. In addition, the cost of finalized rules that went through the OIRA under the current administration was significantly lower than the new rules proposed by the previous administration, according to Sunstein.
This is the first “sustained presidentially-driven intense process for look back,” he said. “There’s never been anything of this level of ambition.”
Business organizations applauded the move but expressed concern that the effort would be overshadowed by new regulations, such as those mandated by the health care and Dodd-Frank financial reform laws.
Sen. John Barrasso, R-Wyo., called the regulations “a giant wet blanket” on the economic recovery. Since issuing the executive order, the Obama administration has only repealed one rule despite proposing over 340 new regulations, Barrasso wrote in a Washington Times op-ed on Tuesday.
Two were finalized in August by the Environmental Protection Agency, including a rule to regulate mileage for medium- and heavy-duty trucks. Together, the EPA regulations will cost $10 billion, according to Barrasso—the same amount Sunstein said the review would save.
Businesses are nervous about what the new regulations will look like. The regulations that will be eliminated in the most-recent review process are largely those the business community has already figured out how to work with, French said.
“It’s an improvement to see them go away, but … if anything it creates a little bit of uncertainty because you have to figure out what the new situation is,” he said. “The administration could be far more constructive by forestalling new rule making.”
The administration’s endeavor is “a worthy effort at making technical changes to the regulatory process,” U.S. Chamber of Commerce’s William Kovacs wrote on the organization’s blog. “But the results of this look back will not have a material impact on the real regulatory burdens facing businesses today.”
House Majority Leader Eric Cantor, R-Va., called the measures “underwhelming.” “Speeches and editorials are not enough to help real job creators in America – small business owners – create middle-class jobs. Action is needed, which is why we must remove onerous federal regulations that are redundant, harmful to small businesses, and impede private-sector investment and job creation,” he said in a statement.
For now, the administration wants to focus on the review process rather than the impact of new regulations.
“Today is look back day,” Sunstein said. But if people have ideas on how to minimize the burden of new regulations, he added, “We’re all ears.”