President Obama claims he’s overseen the creation fewer regulations than his predecessors. But his administration has actually issued far more expensive and economically costly regulations, adding billions of dollars in compliance costs for businesses and job creators. The red tape is documented in a new report by the House Oversight and Government Reform Committee.
Next week the House takes up the Red Tape Reduction and Small Business Job Creation Act, which includes seven measures that would ease the government’s growing burden on businesses and the economy.
The report cites a Gallup poll from earlier this year that found 46 percent of small business owners are not hiring because they are worried about new government regulations, and 48 percent say they are worried about the potential costs of health care.
Homeowners are also being affected by new regulations. In 2010, the Environmental Protection Agency removed an opt-out provision for its Lead Renovation, Repair and Painting Rule. The rule requires that renovations to homes built before 1978 be supervised by an EPA-certified renovator and performed by an EPA-certified firm.
According to the report, the National Federation of Independent Businesses (NFIB) says the elimination of the opt-out has led homeowners to explore underground contractors that do not comply with EPA regulations at all, and that the opt-out had saved the industry approximately $500 million in compliance costs.
In addition to current regulations, the report found that proposed regulations continue to generate uncertainty and could result in significant additional costs to the economy.
The EPA is proposing to redefine “solid waste,” removing specific recycling exclusions from current hazardous waste regulations. As a result, the regulations would even apply to in-house recycling intended for internal use, such as scrap metal yards recycling scrap metal. The Business Roundtable estimates the rule will cost more than $100 million annually in documentation and analysis costs, making it more expensive for businesses to recycle.
According to the NFIB, the EPA is also proposing to expand the definition of “navigable waters” to include depressions and farm ponds that don’t impede the flow of rivers, giving the agency greatly expanded regulatory authority under the Clean Water Act.
Other proposed regulations would advance the administration’s pro-union agenda while ignoring union political activity.
Last year, the National Labor Relations Board issued a final rule requiring employers subject to the National Labor Relations Act to post a notice of employee rights under the law. The notice focuses on employee rights to unionize and collectively bargain, but doesn’t include rights to object to the use of union dues to support political causes. According to the NLRB’s own estimates, the rule could cost 6 million employers an estimated $386.4 million. Much of the rule has been blocked by courts, but business organizations remain concerned about the implications that could result if it is allowed to move forward.
In total, The Heritage Foundation has calculated that the Obama administration adopted 106 major regulations in its first three years. That’s nearly four times the 28 major regulations adopted in the first three years of the Bush administration. Those regulations came at a cost of $8.1 billion, compared to the $46 billion imposed under Obama by the same point in his presidency.
Oversight Chairman Darrell Issa (R-CA) said the report explains why job creators are struggling to put Americans back to work under an increasing regulatory burden.
“Our government can create the environment for the private sector to grow jobs. But under this administration, it won’t. Small businesses, and not the government, are the primary driver of job creation in this country,” Issa said. “This report explains why job creators say they are struggling to put Americans back to work under an ever increasing regulatory burden.”
Tray Smith is currently a member of the Young Leaders Program at The Heritage Foundation.
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