- The Washington Times - Friday, January 21, 2011

With President Obama’s newfound commitment to regulatory reform, we have a consensus on one of the most pressing problems our economy faces as it struggles to create jobs. The $1.75 trillion cost of complying with federal regulations - which amounts to $10,500 per employee every year for small businesses - is crippling our economy. Regulatory review is necessary but not sufficient - especially if regulators are able to move full-steam-ahead to pile even more burdensome red tape onto American businesses while the review is conducted. It’s therefore critical that the president and both parties in Congress come together to enact a full moratorium on any new federal regulations until the regulatory review is completed and the regulatory burden has been reduced substantially.

While the president’s new regulatory review gets started, his Environmental Protection Agency is aggressively pursuing a global-warming agenda rejected by Congress and the American people; his National Labor Relations Board, led by recess-appointed union lawyer Craig Becker, is suing states to pave the way for its backdoor card-check effort; and the Federal Communications Commission (a nominally independent agency whose chairman went to Harvard with Mr. Obama and has logged at least 78 White House visits) has voted to - for the first time - regulate the Internet.

On top of those are twin impending regulatory onslaughts as a consequence of the new health care law and the Dodd-Frank financial regulation bill. Both are being led by Obama appointees who sidestepped Senate confirmation - Dr. Donald Berwick, administrator of the Centers for Medicare and Medicaid Services, who already has brought back the controversial end-of-life-counseling provisions that were removed from the legislation, and Elizabeth Warren, who was installed as a financial czar after then-Sen. Christopher J. Dodd said she was too extreme to be confirmed as the head of the new Consumer Financial Protection Bureau. The Dodd-Frank bill calls for the creation of a staggering 243 formal rules. One of the first, the new debit-card regulations proposed by the Federal Reserve, includes a draconian price cap that already is forcing banks to drop free checking and other valuable services.

If President Obama is serious about regulatory reform, he should immediately end all efforts to use regulatory backdoors to achieve failed elements of his legislative agenda. He should go further and issue an executive order calling for a moratorium on all new federal regulations until his review of existing regulations is complete and the compliance burden has been cut at least in half from its present level of $1.75 trillion.


As a permanent reform, Mr. Obama should endorse the regulations from the Executive in Need of Scrutiny (REINS) Act - part of the Pledge to America on which House Republicans successfully campaigned. The REINS Act is the most important legislative effort to reform the regulatory process in Congress. The bill - recently reintroduced by its lead sponsor, Rep. Geoff Davis of Kentucky - would require an affirmative vote of Congress before any major new regulation could take effect, bringing transparency and accountability to the regulatory process.

Almost every businessperson in this country has a nightmare story about spending enormous sums of money to comply with the latest regulatory requirements - often then forced to turn around and do something entirely different when the whims of regulators change.

We simply cannot afford to let regulators run wild and impose enormous costs on our economy and our economic freedom. A regulatory review is a start, but it will do very little to boost business confidence if an unprecedented slate of new regulations is allowed to be piled on top of the existing regulations under review.

Now that we all agree that federal regulations are a serious economic problem, let’s take a timeout to get the problem under control before we even consider adding to the stifling regulatory burden faced by American businesses.

Phil Kerpen is vice president for policy at Americans for Prosperity.