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Industry Has Spoken… Will the President Listen?

Wednesday, February 23, 2011

In a survey of which regulations most impede the ability to do business, environmental regulation was the greatest concern.

In December 2010, Representative Darrell Issa, Chairman of the House Committee on Oversight and Government Reform, launched an examination of regulatory barriers to business. Chairman Issa sent 171 letters to businesses, industry groups, and think tanks, asking them to identify the government regulations that most impede their ability to do business.

On February 7, 2011, Chairman Issa released a 2,000-page PDF of responses from 113 organizations. We dug into the file, and even we were surprised: While complaints about Occupational Safety and Health Administration (OSHA) regulations, the tax code, and provisions of the new healthcare law were expected, the clear focus of most responses was environmental regulation. As the Small Business and Entrepreneurship Council warned:

The general regulatory thrust of the Administration with regard to energy and the environment will lead to less energy, higher energy prices, a disincentive to manufacture in the U.S. and massive job loss. Our energy sector is being forced into a regulatory vice—caps and restrictions are being imposed on how much America can use and produce, while excessive regulation on energy use and the industry are driving costs higher. Anti-energy activists in the regulatory bureaucracies seem accountable to no one. Unfortunately, small business owners and their workforce will bear the brunt of higher costs and widespread job loss if initiatives at the Environmental Protection Agency move forward.

Of the total complaints that each organization had agencies, EPA dominates the field. Of the 651 total complaints, 334 of those pertained to EPA—a whopping 51 percent.

Between Greenhouse Gas regulations through the Clean Air Act, Boiler Maximum Achievable Control Technology standards, and National Ambient Air Quality Standards for Ozone and other criteria pollutants, the Environmental Protection Agency’s (EPA) onerous regulatory agenda was perceived as the greatest threat to business. The American Coke and Coal Chemicals Institute (ACCCI) explains:

In recent months, EPA has undertaken an unprecedented regulatory agenda by promulgating or proposing a host of rules in the areas of air, water, solid waste, greenhouse gases, and toxic chemicals … in a nutshell, these new regulations will create permitting obstacles to expand and modernize our facilities and will impose significant additional costs that are difficult recoup in the face of intense international competition.

ACCCI was not alone in their opinion. Counting the total number of complaints that each organization had about each agency, EPA dominates the field. Of the 651 total complaints, 334 of those pertained to EPA—a whopping 51 percent. The next closest agency—at only 8 percent—would be the Department of Labor, which combines complaints about OSHA, the Mine Safety and Health Administration, and National Labor Relations Board regulations.

 

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Even taking a more conservative approach, tallying only the number of organizations who have complaints that pertain to each agency, yields similar results. EPA is still the clear winner, with 82 of 113 responses specifically mentioning the agency’s regulations. The distant runner up remains the Department of Labor, which was mentioned in 22 of the 113 responses.

 

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Our methodology is not perfect, since responses varied in formatting, and not all organizations listed specific regulations or went into as much detail as others. For example, while the U.S. Chamber of Commerce listed 17 EPA regulations, the Association for Manufacturing Technology did not cite specific regulations, but rather explained that

in many cases, regulations are excessive, confusing and so costly that R&D and business development suffer as a result, hindering job growth and stifling innovation. This is particularly true with regulations originating from the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA), where it is obvious that regulators know little or nothing about manufacturing.

It is clear that EPA regulations are perceived as a serious obstruction to job creation and private-sector efficiency, and that proposed EPA regulations are seen as an even greater threat.

But despite the data’s limitations, EPA regulations are clearly perceived as a serious obstruction to job creation and private-sector efficiency, and proposed EPA regulations are seen as an even greater threat. The results are in, and the best way to fix onerous regulations is to cut the EPA. But will President Obama listen?

In his January 25, 2011, State of the Union address, President Obama expressed his concern about government regulation and promised, “When we find rules that put an unnecessary burden on businesses, we will fix them.”

Yet if President Obama’s 2012 budget proposal is any indication, the administration’s emphasis on climate regulation is not over. While the proposed plan cuts $1.3 billion from the EPA budget, the cut is mostly comprised of reduced funding for states’ clean water and drinking water projects, and the Great Lakes Restoration Initiative. The agency’s economically harmful regulatory agenda faces no serious budget cuts.

In its response to Chairman Issa’s letter, the Murray Energy Corporation expressed its concern for hardworking Americans “whose jobs and lives are being destroyed by Mr. Obama and his out-of-control, radical USEPA and his appointees to it.” While it is tempting to believe President Obama’s promises of change, all the evidence indicates that the president and his out-of-control EPA will continue burdening the private sector with excessive regulation.

Kenneth P. Green is a resident scholar at the American Enterprise Institute, where Hiwa Alaghebandian is a research assistant.

FURTHER READING: Green and Alaghebandian have also described how “Science Turns Authoritarian,” while Aleghebandian suggests a “Homework Assignment” for Congress on telework. Green uncovers “The Myth of Green Energy Jobs: The European Experience,” outlines “Empowering the Free Energy Markets,” and says it’s “Not Going Away: America's Energy Security, Jobs and Climate Challenges.”

Image by Rob Green/Bergman Group.

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