PRICE: Regulations are choking small business engine of growth
The cost is $1.75 trillion. That’s the price of complying with Washington red tape — and that’s not a misprint.
While the federal government has the responsibility to establish reasonable regulations to help protect the American people, federal rule-making is so costly and cumbersome that it actually impedes job creation and economic growth.
That grim reality comes into focus when one looks at the Federal Register, the official compilation of federal regulations. It’s only July, yet this year’s edition already is 41,662 pages long. Complying with these new rules will cost $55.6 billion and require 114.1 million paperwork hours to complete. That is money and time lost on unproductive activity — all done to avoid the punishing arm of an intrusive federal government.
President Obama boasts that he has taken major steps to improve America’s regulatory climate. The truth is that his administration has expanded the federal government’s reach and oppression. He has instituted four times the number of major regulations of President George W. Bush, and they cost five times as much.
A “major regulation” is one that federal agencies estimate will create an economic impact of more than $100 million annually. Since taking office in January 2009, Mr. Obama has instituted 106 major new federal regulations, adding more than $46 billion in compliance costs for American families and businesses. That’s $46 billion taken out of a productive economy. No wonder jobs aren’t returning.
One of the most egregious red-tape initiatives of this administration is the Dodd-Frank law. According to the House Committee on Financial Services, just 224 of Dodd-Frank’s 400 rules have been written, and they already consume 7,365 pages. It will take job creators 24.2 million hours every year just to comply with the first half of Dodd-Frank regulations.
Another outrageous example is the president’s health care law, which greatly expands the government’s reach into every American’s life. This disastrous law will result in a minimum of $17.1 billion in regulations imposed on the private sector and $7.2 billion in compliance costs borne by the states.
Moreover, onerous regulations most severely affect small businesses — the true engine of the American economy. Complying with federal red tape costs them approximately 36 percent more than large corporations.
The National Federation of Independent Businesses recently discovered that 19 percent of its members considered “unreasonable regulations and red tape” to be their most important business problem. As the real unemployment rate hovers around 15 percent, need I say more?
In response, the House of Representatives is slated to pass the Red Tape Reduction and Small Business Job Creation Act (H.R. 4078), which will freeze economically significant regulations that harm our economy until unemployment falls to 6 percent or lower. According to one estimate, that would save $22.1 billion and 2.6 million paperwork hours annually, thereby creating thousands of jobs.
This reform package also includes recommendations from Mr. Obama’s jobs council. Perhaps those reforms haven’t been implemented yet because he hasn’t met with council members in more than 100 days. Many of the provisions even enjoy bipartisan support. Whether it’s shortening the permitting process for new construction projects or mandating oversight of the regulatory powers of federal agencies, the Red Tape Reduction and Small Business Job Creation Act will enact common-sense reforms that are neither Republican nor Democrat. They are just good American policy.
House Republicans agree with Mr. Obama that there are “rules on the books that are needlessly stifling job creation and economic growth.” Let’s do something about it. To make good on his commitment to cut excessive red tape, we call on him to get his Democratic colleagues in the Senate to pass our plan.
Responsible red-tape reform would curb the power of Washington to make decisions that adversely affect our economy and our lives. This would signal to the American people, especially job creators, that Washington is serious about improving our country — even if it means limiting our own power.
Rep. Tom Price, a physician, is a Georgia Republican and chairman of the House Republican Policy Committee.