- The Washington Times - Monday, June 27, 2011

ANALYSIS/OPINION:

It’s always dangerous to forecast the future, and projecting the outlook for American public policy is particularly challenging. Political crystal balls are notoriously cloudy.

Yet here’s a pretty safe bet. Right now, it looks as if one issue will dominate the 2012 election: jobs. The party or candidate that articulates a plausible plan for employment will win.

And I’ll go out on a limb again. This debate won’t end in November 2012. America needs a Jobs Decade - a comprehensive and sustained effort to rekindle employment growth over the next 10 years. This long-term project cannot wait; it must start today.

A recent report published by the McKinsey Global Institute diagnoses our growing jobs dilemma.

First, the report demonstrates that the U.S. is taking increasingly longer to rebound from economic downturns. For example, between Word War II and the 1980s, it took only about six months for employment to rebound to pre-recession levels. After the 1990-91 recession, that number grew to 15 months. Following 2001, the recovery period ballooned to 39 months - and it’s getting worse. McKinsey now projects it will take more than 60 months for employment to recover - about 10 times the length of economic misery compared to 30 years ago.

In other words, our stubbornly high unemployment rate will be our companion for some time.

Second, the study points to the sluggish pace of new-business creation. McKinsey notes there has been a 23 percent drop since 2007 in startups. This alone translates to at least 1.8 million fewer jobs.

Finally, the McKinsey study projects that the U.S. economy will have to produce 21 million jobs over the next decade to return to full employment.

That’s a tall order. So what can be done?

A group of lawmakers on the House Energy and Commerce Committee - the panel I chair - has already begun to look for solutions. In our quest for job creation, we keep uncovering evidence pointing to a major culprit behind the malaise: the vast web of costly, duplicative and often ineffective federal regulations. This Washington-imposed juggernaut impacts every business or potential business in industries including health care, financial services, energy and the environment.

The McKinsey study agrees with our assessment. It concludes that regulations are one of the primary drags on job creation. Delay, uncertainty and higher costs imposed by the government cause business investment to dry up or look for better opportunities in foreign countries.

The report reveals an ominous concern among many businesses: “[W]e have heard a relatively new and disturbing theme from some companies: They hesitate to invest in the United States because of the complexities, real or perceived, of existing regulations and regulatory processes.”

In the first six months of this year, the House Energy and Commerce Committee found mountains of evidence consistent with McKinsey’s findings about the link between regulatory burdens and lagging job creation.

In one example uncovered this year, the Environmental Protection Agency and an obscure offshoot of that agency, an Environmental Appeals Board, blocked the exploration and production of offshore oil in Alaska that would have created thousands of jobs and eased consumer pain at the pump. We said enough is enough. The House recently passed legislation that came out of the Energy and Commerce Committee to put an end to these costly delays.

The regulatory roadblocks extend to oil from Canada as well: The Obama administration’s EPA continues to throw new barriers in the way of approving the Keystone XL pipeline from Canada, another project that would create thousands of jobs and more price-reducing supply from a friendly neighbor.

Health care is another example. Instead of trying to speed the process for getting innovative medical devices and lifesaving medicines to patients, the Food and Drug Administration is becoming less transparent and more opaque, which is dramatically increasing the time it takes for such products to reach Americans who need them. Many health care executives have told us they may leave the United States altogether in search of a more innovation-friendly political environment; the result will be fewer jobs in America and fewer breakthrough treatments for our patients.

It’s time to stop viewing American business as a juicy target for power-hungry regulators and instead acknowledge its role in the job-creation puzzle.

The McKinsey analysts agree with this view. “Governments at all levels can have an immediate impact on U.S. job creation by fixing how existing regulations are administered. That means accelerating the speed of decision-making, eliminating redundancy, and improving interagency and intergovernmental cooperation - steps that make it easier for companies to pursue investment and expansion while following the rules.”

We do need an American Jobs Decade. But we’ll never achieve that goal as long as we slow down and stifle those trying to build it. Reforming our current regulatory system will provide the tools to help businesses to invest, grow and hire people.

Rep. Fred Upton is a Republican from Michigan and chairman of the House Committee on Energy and Commerce.

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