Regulations by the federal government have run amok. In President Barack 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, each with compliance costs of at least $100 million. (George W. Bush, no regulatory piker, imposed 426 major regulations.) Obama’s 600 major regulations totaled an estimated $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 Donald 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 health care 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 an 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.
[Copyright By ARCHIE M. RICHARDS Jr]