|Five GOP Bills Obama Should Support|
By Ashton Ellis
Thursday, November 15 2012
Convinced that he has a mandate to increase taxes in his second term, President Barack Obama is reportedly planning to “barnstorm” the country in January if House Republicans fail to accept his demands.
But before Obama bills taxpayers for his transcontinental victory lap, he would be wise to rethink his opposition to five House-passed regulatory reform measures currently languishing in the Democrat-controlled Senate.
Because increases in regulation decrease profit by shifting resources toward compliance rather than growth, new regulations have the same effect as new taxes. If Obama is looking for a way to build credibility on a tax reform deal with House Republicans, he would be wise to persuade his fellow Democrats to pass these House-backed regulatory reforms.
1. Regulations from the Executive In Need of Scrutiny (REINS) Act
Since the regulatory spree inaugurated by the New Deal, Congress has been complicit in the enormous increase in federal regulations. Every year these rules further constrict the ability of the private sector to create jobs and grow the economy. The game goes like this. Congress passes a vague law empowering an agency to regulate an entire industry or activity. The agency writes rules and implements them, at huge costs to consumers and producers. Congress is outraged, but does little to stem the tide.
In 2010 alone, federal agencies implemented 100 “major rules,” meaning each rule is expected to have an economic effect of $100 million or more annually. Congress has very little power to stop such regulations from going into effect, and no incentive to tinker with them once the market absorbs them. The REINS Act corrects this problem by requiring any major rule to be approved by both houses of Congress before it becomes law.
2. Regulatory Accountability Act
Where the REINS Act targets the impact of major rules, the Regulatory Accountability Act (RAA) reforms the way rules are made. Currently, agencies under a president’s control are required by executive order to use cost-benefit analysis when evaluating the impact of their proposed regulations. But executive orders can be rescinded by any president at any time. Under RAA, the cost-benefit requirement becomes legally required no matter which president is in office.
RAA also extends the cost-benefit rule to independent agencies, so called because technically they are not under the direction of a president when making policy decisions. Examples include the National Labor Relations Board and the Federal Communications Commission. Under Obama, both the NLRB (in rulings against right-to-work states) and the FCC (with its misnamed Net Neutrality policy) have proposed sweeping regulatory changes without bothering to consider how much their dictates will cost. It’s time for every agency in the federal bureaucracy to calculate the burden of its regulations.
3. Red Tape Reduction and Small Business Job Creation Act
One of the biggest complaints from the private sector is that the barrage of costly new rules spewing out of Washington makes it almost impossible to justify expanding staff levels or capital improvements. Faced with a string of unfunded mandates from laws like Obamacare and others, small businesses are wisely opting to stockpile money and outsource jobs, rather than risk hiring full-time workers who are too expensive to employ.
If it became law, this bill would prohibit any new economically significant regulation from going into effect unless the unemployment rate falls to 6 percent or below. It would also remind bureaucratic administrators of the link between regulation and the job market.
4. Reducing Regulatory Burdens Act
Speaking of the job market…
This bill easily could be called the Pesticide Industry Relief Act, but the official name is more attractive and just as accurate. In 2006, a federal appeals court threw out the Bush EPA’s decision not to require crop dusters and other pesticide sprayers to obtain a permit under the Clean Water Act (CWA).
The Bush EPA had three good reasons opposing yet another permit process. First, pesticide regulation is covered under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), not CWA. Second, pesticides already go through a rigorous screening process under FIFRA, so users know the relevant guidelines. Third, the extra compliance costs would be oppressive. By its own count, EPA estimates that the new permit gauntlet will add 1,033,713 hours of work for permit-seekers, as well as 45,809 hours of work for officials to process them.
Because of all this, it’s no wonder the Reducing Regulatory Burdens Act was passed unanimously by Republicans and Democrats out of committee, and with all Republicans and 57 Democrats voting to send it to the Senate. Getting this bill signed into law would mark at least one occasion where Obama took seriously complaints about onerous and duplicative compliance costs.
5. Regulatory Flexibility Improvements Act
Of the bills mentioned thus far, this may be the least likely to inspire a regulatory reversal by President Obama since he has already threatened a veto if it ever comes to his desk.
Still, the measure has merit. If passed, the Regulatory Flexibility Improvements Act would draw bureaucrats’ attention to the impact of new regulations on small businesses, meaning those entities without recourse to lobbyists, lawyers and other liaisons to soften the blow rules have on the bottom line. RFIA would increase the quantitative data available on how a proposed regulation could harm or benefit small businesses by requiring agency officials to post their findings on the agency’s website.
When he entered office, Obama promised to preside over “the most transparent administration in history.” Changing his tune on RFIA would be a big step in that direction.
Signing any of these reforms into law would help build toward the kind of bipartisan consensus Republicans and Democrats will need to make any real progress on a tax reform deal, but the clock is ticking.
When the new Congress is sworn-in in January the legislative system resets, and all of the bills that failed to get to the president will die.
In order to get the nation’s economy moving in the right direction, House Republicans and the Obama White House should make the latter’s campaign slogan their own: “We Can’t Wait.”
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