Regulations by the federal government have
run amuk. In President Obama’s final year, the Federal Register, containing public
notices of all rules and regulations, hit a whopping 97,110 pages.
The annual cost of compliance with
regulations amounts to about $2,500 per person. Regulations block innovation, devote
resources to compliance instead of growth, and suppress employment. They’re a
major reason for the nation’s anemic rate of growth.
The Obama Administration put in place 600 major
regulations with compliance costs of at least $100 million. (George W. Bush, no
regulatory piker, imposed 426 major regulations.) Obama’s 600 majors cost at
least $743 billion, larger than the economies of Norway and Israel combined.
A few pebbles thrown in a stream has no
noticeable effect on the water flow. But a carload of pebbles has great effect.
The U.S. economy suffers from carloads and carloads of regulations. Here are
examples:
· When President
Obama took over, the U.S. ranked third in the ease of doing business. It has
fallen to eighth place.
· Eight years ago,
40 days were needed to obtain a construction permit. Now it’s 81 days.
· In 2008, enforcing
a contract in America took 300 days. Today, 420 days. (Enforcing a contract in
Greece requires more than four years – one reason for that nation’s travails.)
· A company that has
a contract or subcontract with the government must establish a plan that will
enable its workforce to include 7 percent disabled.
· For people who’ve
had accidents, the government bans blanket policies on drug testing. Why? Because
blanket drug testing might be discriminatory.
· Companies are required
to adopt the United Nation’s system of labeling chemicals. To comply with the
relabeling and reclassification requirements, affected companies must spend an
estimated $2.1 billion.
· The Dodd-Frank
Bill was intended to prevent another financial crisis. It would do no such
thing, but the bill is loaded with unnecessary regulations harmful to banking
and finance.
· The National
Association of Manufacturers estimates that federal regulations have forced
manufacturing companies to pay more than $19,500 per employee to remain in
compliance with rules and regulations. Who pays the cost? We do. To remain in
business, companies must raise the prices of their products.
There’s hope: For every dollar of new regulatory
costs each agency imposes on the private economy, President Trump has ordered
that it must relieve the economy of two dollars of burden.
Congress is working on a bill that
requires congressional approval before regulations costing $100 million or more
would take effect.
An Obamacare rule, up for reversal, requires
companies with 50 or more employees to provide healthcare coverage for all of
its workers. This has induced companies to limit the number of employees to just
49, even though many firms would have preferred to expand.
Another administration target: a rule
designed to undermine oil and gas fracking on federal land.
Still another: An SEC rule that forces U.S.
companies to report payments to foreign governments. The rule would require
companies to disclose proprietary information that competitors could use
against them.
Congress will repeal a regulation that
requires companies to disclose the natural resources they’re extracting – a
rule that does not apply to foreign companies.
The Stream Protection Rule, already revoked,
would have destroyed tens of thousands of mining jobs and put almost two-thirds
of the nation’s coal reserves off limits.
From 1980 to 2012, the economy grew at the
annual rate of 2.7 percent. In a careful study, the Mercatus Center found that
if federal regulations had been frozen at the 1980 level, the economy would
have grown at 3.5 percent per year instead of 2.7 percent. The GDP would have
been $19.5 trillion instead of $15.2 trillion – about 25 percent larger. Per
capita, Americans would have been $13,000 wealthier.
Even in the starting year of the above Mercatus
study, 1980, the Federal Register contained 87,012 pages – only 10,000 fewer than
the current number.
Federal regulations are a huge burden. Reductions
have begun. Many more are needed.
An
earlier draft was sent to many papers on April 9, 2017. This draft was
published by the Concord Monitor on June 15, 2017.
