GATTUSO and KATZ: Regulation and Obama’s numbers game

President’s rules are fewer, but they pack a harder wallop

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Statistics, they say, is the art of torturing numbers until they confess. If so, they must have a rack built somewhere in the White House. Consider how the administration presents its regulatory record. Stung by criticism that a flood of new regulations is stunting economic recovery and job creation, President Obama decided the best strategy was to manipulate the facts: In his latest State of the Union address, he claimed to have approved “fewer regulations in the first three years of my presidency than my Republican predecessor did in his.”

Technically, he’s correct. But a less selective look at that fact shows that Mr. Obama has imposed far more burdens on the American public than his immediate - or perhaps any other - predecessor.

Not that the president hasn’t tried to masquerade as a regulatory reformer. In January 2011, Mr. Obama announced with much fanfare a new get-tough policy on overregulation. Acknowledging that “rules have gotten out of balance” and “have had a chilling effect on growth and jobs,” he pledged a comprehensive review of regulations imposed by the federal government.

But this promise of restraint has been drowned in the torrent of new rules that started in 2009 and has continued unabated. A just-released Heritage Foundation study documents that the administration increased annual regulatory costs by $10 billion in 2011. In contrast, the much-touted regulatory-relief effort has yielded barely $200 million in savings.

Overall, the Obama administration has issued 106 major regulations in the past three years, with new regulatory costs exceeding $46 billion. By comparison, the Bush administration imposed 28 major regulations, adding $8.1 billion in new annual costs.

In making his boast, the president chose his words carefully. It is technically correct that there have been slightly fewer rulemakings during the three years of his administration compared with the first three years of the Bush administration.

But not all rules are equal. Some have substantial impact, but the vast majority are routine actions, such as annual fishing quotas and drawbridge schedules. When it comes to “major” rules - those with an impact on the private sector of $100 million or more - Mr. Obama has outregulated Mr. Bush by 4 to 1 in the number of rules and 5 to 1 in the cost.

These new regulations cover a broad range of activity, including energy standards for fluorescent ballasts, refrigerators, freezers, clothes dryers and air conditioners; limits on automotive emissions of “greenhouse gases”; employer requirements for posting federal labor rules; more explicit warnings for cigarette packaging; health plan eligibility standards under Mr. Obama’s health care legislation; and higher minimum wages for foreign workers.

Last year, the largest proportion of regulations - 12 - stemmed from the 2010 Dodd-Frank financial-regulation statute, including six from the Securities and Exchange Commission, five from the Commodity Futures Trading Commission and one from the Federal Reserve.

Meanwhile, rulemaking related to Mr. Obama’s health care legislation encompasses more than 150 federal agencies. And it appears that the rules are changing faster than regulators can write them. Administrators have granted nearly 2,000 waivers to the new health care regulations, for instance, while the long-term care insurance plan called for in the legislation has been dropped as unworkable.

More stringent energy conservation standards for refrigerators and freezers also rank among the most costly regulations of 2011. Imposed by the Department of Energy, the mandatory standards will increase regulatory costs by nearly $1.4 billion annually. Energy-conservation standards for furnaces and air conditioners will cost an additional $650 million per year, while requirements for fluorescent ballasts will add $363 million more in costs annually.

Don’t expect this regulatory tide to ebb anytime soon. Hundreds of new regulations are winding through the rulemaking pipeline as a consequence of Dodd-Frank, Obamacare and the Environmental Protection Agency’s global-warming crusade.

Action is sorely needed - by Congress and the White House. No longer should lawmakers be allowed to evade accountability by routinely delegating their authority to bureaucrats. One way to restore accountability would be to require the approval of Congress before any major rule takes effect. And every major rule should have an automatic “sunset” date, the better to protect against the ever-growing collection of obsolete regulations.

Beyond the cost, excessive regulation is eroding liberty to an alarming degree. Americans should demand that Washington get off our collective back - and respect the limits that our Constitution places on government.

James Gattuso is senior research fellow in regulatory policy at the Heritage Foundation (heritage.org), where Diane Katz is research fellow in regulatory policy.

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