18 Jan 2011 Mr. President, You Are Right We Need to Bring Common Sense to our Regulatory System: Let’s Start with the Environment
Mr. President, you are right on the mark when you write in today’s Wall Street Journal that “vibrant entrepreneurialism is the key to our continued global leadership and the success of our people.” You are right when you say we must “root out regulations that conflict, that are not worth the cost, or that are just plain dumb.”
Where you lose me is the rest of the article.
“Over the past two years, the goal of my administration has been to strike the right balance.” Just where do you believe this “balance” has occurred?
Last year, your Administration released 43 major new regulations costing the American people a record increase of $26.5 billion, according to a new study by the Heritage Foundation (for complete disclosure, one of the authors is my husband). Another study commissioned by the Small Business Administration puts the total annual cost of regulations at $1.75 trillion. That’s almost twice the amount Americans pay in individual income taxes.
Over the same period, your Administration also enacted five rules to reduce regulatory burdens, a savings of $1.5 billion. Mr. President, I ask you, where’s the “balance”?
Most of the last year’s regulatory costs—88 percent—come from environmental regulations. The costliest of these regulations, according to the Heritage study, is the new fuel-economy auto standards you refer to in your article, which will impose a massive annual cost of $10.8 billion.
You write the new regulations mean consumers will pay less at the pump. Yet according to your own National Highway Traffic Safety Administration, the new fuel-economy standards will raise the average cost of new vehicles from $457 in 2012 to $985 by 2016.
You write, “From child labor laws to the Clean Air Act…we have, from time to time, embraced common sense rules of the road that strengthen our country without unduly interfering with the pursuit of progress and the growth of our economy.”
Yet your own new rules to cut greenhouse gas emissions which went into effect early this month would grossly impact the growth of our economy, reducing U.S. investment, and costing jobs which are so critical to the nation’s recovery.
The American Council for Capital Formation estimates that requirements for stationary sources this year could reduce investment by $97 billion and by as much as $301 billion by 2014. According to the Affordable Power Alliance, that could cost a whopping 2.5 million jobs and reduce household income by $1,200 a year by 2030.
Worse, the regulations would have an unjust and disproportionately large impact on African Americans and Hispanics, costing African Americans an estimated 1.7 million jobs and $550 in average household income by 2015.
And all for what? This, from Time Magazine:
[T]he EPA’s regulations won’t do that much to reduce U.S. greenhouse-gas emissions. While the carbon cap-and-trade bills debated by Congress last year would have aimed to cut U.S. emissions 17 percent below 2005 levels by 2020, EPA officials believe that regulations could only achieve perhaps a 5 percent cut…
Furthermore, your moratorium on offshore drilling, along with other regulations impeding domestic oil production, is already threatening economic recovery in the form of climbing oil and gas prices.
Your announcement today of an executive order for a government-wide review of all rules and regulations is a start if it gets to the heart of overzealous regulations that impose huge costs. But you should be aware these go far beyond mere regulatory inconsistencies, such as one agency calling saccharin safe while another calls it a hazardous waste. The first place to start is with your own regulations and the impact they will have on jobs, the economy, and Americans’ lives.