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Regulations to headline D.C. debate

Published: Friday, Sept. 2 2011 11:17 a.m. MDT

In this Aug. 31, 2011 file photo, President Barack Obama speaks in the Rose Garden of the White House in Washington. President Barack Obama is sacking a controversial proposed regulation tightening health-based standards for smog, bowing to the demands of congressional Republicans and some business leaders. In a statement Friday, Obama said he had ordered Environmental Protection Agency administrator Lisa Jackson to withdraw the proposal, in part because of the importance of reducing regulatory burdens and uncertainty for businesses at a time of rampant uncertainty about an unsteady economy. (Associated Press) In this Aug. 31, 2011 file photo, President Barack Obama speaks in the Rose Garden of the White House in Washington. President Barack Obama is sacking a controversial proposed regulation tightening health-based standards for smog, bowing to the demands of congressional Republicans and some business leaders. In a statement Friday, Obama said he had ordered Environmental Protection Agency administrator Lisa Jackson to withdraw the proposal, in part because of the importance of reducing regulatory burdens and uncertainty for businesses at a time of rampant uncertainty about an unsteady economy. (Associated Press)

With Congress due to reconvene in Washington, D.C., Sept. 7 and President Barack Obama scheduled to present a jobs-focused speech on Sept, 8, government regulations are expected to take center stage in the coming months.

In January, Obama issued an executive order to step up oversight of government–issued regulations, saying in an op-ed at the Wall Street Journal that his administration would seek a balance of protecting the public interest and easing unreasonable burdens on business.

“Where necessary, we won’t shy away from addressing obvious gaps: new safety rules for infant formula; procedures to stop preventable infections in hospitals; efforts to target chronic violators of workplace safety laws,” the president writes. “But we are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb.”

In August, the administration released regulatory reform plans officials say will save businesses $10 billion over five years.

This Monday, Aug. 1, 2011 picture shows the U.S. Capitol just after the House voted to pass debt legislation on Capitol Hill in Washington. (Associated Press) This Monday, Aug. 1, 2011 picture shows the U.S. Capitol just after the House voted to pass debt legislation on Capitol Hill in Washington. (Associated Press)

“As the president has said, ‘We can make our economy stronger and more competitive, while meeting our fundamental responsibilities to one another,’” Cass Sunstein, the administrator of the Office of Information and Regulatory Affairs, writes in the Wall Street Journal. “We will continue to eliminate unjustified regulatory costs — and thus to strengthen our economy — while taking sensible, cost-effective, evidence-based steps to protect public health and welfare.”

According to USA Today, the U.S. Chamber of Commerce withheld its full endorsement of the rules, saying more needed to be done to help businesses.

“The administration’s finding and determinations, on their own, are a worthy effort at making technical changes to the regulatory process,” Bill Kovacs said. “But the results of this lookback will not have a material impact on the real regulatory burdens facing businesses today.”

Since the executive order in January, the administration has successfully repealed only one rule — a rule that treated spilled milk like an oil spill — Sen. John Barrasso, R-Wy., says in The Washington Times.

“By contrast, since the start of the year, the administration has proposed more than 340 regulations at the cost of more than $65 billion to job creators,” he said. “It is important to note that these are only the regulations for which the administration actually conducted an economic analysis.”

If the federal government’s regulatory operation were a business, it would be one of the 50 biggest in the country in terms of revenue, and would have more people working for it than McDonald’s, Ford, Disney and Boeing combined, Investors.com reports.

According to Reginfo.gov, the government website detailing federal regulations, there are currently 4,257 regulations in the works. In contrast, there are 10 government agencies with regulations under review, in accordance with the president’s executive order. The regulations under review total 127.

In a letter to the president written by Speaker of the House John Boehner, R-Ohio, on Aug. 26, Boehner broke down the regulation numbers to identify 219 planned new regulations that would cost in excess of $100 million each.

Boehner asked the administration to provide a list of pending and planned rules with a projected economic impact of more than $1 billion.

The president sent a letter in response, stating that seven rules fitting those parameters have been proposed. However, Obama cautions, the rules are “merely proposed, and before finalizing any of them, we will take account of public comments and concerns and give careful consideration to cost-saving possibilities and alternatives.”

The regulations include:

National Emission Standards for Hazardous Air Pollutants for Coal- and Oil-Fire Electric Utility Stream Generating Units. Cost estimate: $10 billion.

National Emission Standards for Hazardous Air Pollutants for Major Source Industrial, Commercial & Institutional Boilers and Process Heaters. Cost estimate: $3 billion.

Standards for the Management of Coal Combustion Residuals Generated by Commercial Electric Power Producers. Cost estimate: $.06 billion-$1.5 billion.

Federal Motor Vehicle Safety Standard No. 111, Rearview Mirrors. Cost estimate: $2 billion.

Electronic On-Board Records and Hours of Service Supporting Documents. Cost estimate: $2 billion.

Hours of Service. Cost estimate: $1 billion.

The regulations also included a plan to tighten smog regulations, which had an estimated cost of $29 billion-$90 billion. However, Obama directed the EPA to withdraw the proposed regulation on Friday.

However, the American Action Forum said the president’s letter omitted other regulations that would have a cost of around $24.7 billion, and it does not include estimations of regulations in the Dodd-Frank Wall Street Reform and Consumer Protection Act and the health care bill.

These two bills alone and the regulations they include are already having an impact on how business is done in the United States.

The Congressional Research Service said in a 2010 report that the health care bill — The Patient Protection and Affordable Care Act — was written so regulatory agencies could "fill in the details," and estimates health care regulations associated with the bill will be issued for years, or even decades, to come.

The Dodd-Frank Act, which was touted as a way to fix problems with banking regulations, is being blamed for making it difficult for businesses to get access to capital, The Hill reports.

Although all businesses feel the weight of regulations, small businesses in particular carry a “disproportionate share of the federal regulatory burden,” a 2010 Small Business Administration report said. According to the report, the annual cost of federal regulations is $7,755 per employee for firms with 500 or more people, but $10,585 per employee for firms with fewer than 20 people. The total cost of federal regulations has also increased to $1.75 trillion.

With the unemployment rate sitting stationary at 9.1 percent and employers adding no net jobs in August, business leaders and organizations warn regulations will continue to have a chilling effect on the economy.

Sara Lee CEO Christopher J. Fraleigh criticized new administration rules regarding advertising and children that would keep his company from advertising even a turkey sandwich during the Super Bowl. According to Fraleigh, government guidelines would mean companies couldn’t advertise hot dogs in stadiums because children might be present, and chocolate Easter bunnies would be disallowed because the character appeals to children.

Phil Kerpen, vice president for policy at Americans for Prosperity, writes at The Hill that the Federal Communications Commission plans to move forward with new rules regarding phone and cable companies that would slash private investment by about 10 percent and destroy as many as 200,000 jobs a year.

The Heritage Foundation highlights an Equal Employment Opportunity Commission lawsuit brought against Old Dominion Freight Line Inc. for firing a truck driver with an admitted alcohol abuse problem. If the EEOC wins, Heritage contends, “Old Dominion will still be liable both for any damage to life or property that results from a potential relapse by one of its recovering drivers,” and “for the cost of trying to ensure that such damage never occurs.”

Openmarkets.org, the staff blog of the Competitive Enterprise Institute, highlights other “job-destroying regulations,” including lawsuits filed against employers who consider applicants’ arrest records and criminal convictions in hiring, colleges that want to use electronic book readers and restaurants with counters that are too high for people in wheelchairs to see the food being prepared.

The Gibson Guitar Corp. also recently came under fire from regulators for the second time since 2009. The Gibson factories were raided in August by federal agents, who say the company has been buying illegally harvested hardwoods from protected forests, The Wall Street Journal reports. Other companies that use the same wood from the same countries have not been raided.

During an interview with KMJ-AM, Chairman and CEO of Gibson Henry Juszkiewicz said the government wrote in a pleading that Gibson wouldn’t be in trouble if they used Madagascar labor instead of American labor.

Solyndra, a solar company that was awarded a federal loan worth $535 million and was touted by the president in a 2010 visit, recently filed for Chapter 11 bankruptcy, citing “regulatory and policy uncertainties in recent months” that have “created significant near-term excess supply and price erosion.”

In Congress, Eric Cantor, the House majority leader, released details of the “regulatory relief agenda” House Republicans plan to pursue following their return to Washington.

The list includes tackling the National Labor Relations Board complaint against Boeing for opening a plant in South Carolina, the administration’s new maximum achievable control technology standards and cross-state air pollution rule for utility plants, the cement MACT rule, the NLRB’s recent alterations to union representation rules and the EPA’s farm dust rule.

During the president’s bus tour through the Midwest, Obama was questioned about the farm dust rule specifically, and he responded that people shouldn’t believe everything they hear about regulations in Washington.

Obama also told attendees at town halls to contact the U.S. Department of Agriculture directly to get information on pending regulations. Politico reporter MJ Lee took his advice and was unable to find the answer to the farmer’s question.

In a letter to Lisa Jackson of the EPA, 21 Senators voice their concerns about the farm dust ruling specifically, saying the current standards have been “difficult if not impossible” to attain.

“We respect efforts for a clean and healthy environment,” the letter states, “but not at the expense of common sense.”

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