How A Broken Process Leads To Flawed Regulations

Chairman Issa Hearing Preview Statement

Just recently, in a decision to halt the implementation of a controversial job-killing regulation by the Environmental Protection Agency, President Barack Obama recognized the “importance of reducing regulatory burdens and regulatory uncertainty” in the economy. While President Obama has spoken about, and even launched an effort to evaluate regulations that create unnecessary burdens, regulatory agencies under his administration have gone the opposite direction.

The number of proposed rules has increased from 2,044 in 2009 to 2,439 in 2010.  Regulatory agencies have seen their budgets grow by 16 percent over the past three years.  As Investor’s Business Daily summarized, “[i]f the federal government’s regulatory operation were a business, it would be one of the 50 biggest in the country in terms of revenues, and the third-largest in terms of employees, with more people working for it than McDonald’s, Ford, Disney and Boeing combined.”   Employment at regulatory agencies has climbed 13 percent since President Obama took office, and the number of staff working on regulatory matters is on schedule to increase at a rate of 10,000 new regulatory employees per year in 2011 and 2012.  The number of full time regulatory employees is expected to reach an all-time high of 291,676 in 2012.  Meanwhile, since President Obama took office, private sector jobs have declined by 5.6 percent.

Wednesday’s hearing, “How the Administrative State has Broken Obama’s Promise of Regulatory Reform will examine the effects of broken regulations on businesses and working Americans.  The hearing will also seek answers from the Administration about how, despite apparent orders to the contrary, regulators are advancing new rules in ways intended to avoiding meaningful scrutiny by employing numerous gimmicks:

• Refusing to perform accurate cost-benefit analysis
• Overturning decades of precedent without justification
• Entering into sue and settle agreements
• Enacting policy changes through guidance documents
• Improperly issuing emergency rulemakings

The regulatory process is broken, being manipulated and exploited in an effort to reward allies of the Obama Administration such as environmental groups, trial lawyers, and unions.  Regulators have, in too many instances, been willing accomplices in the strategy advanced by outside interest groups to circumvent the oversight and accountability checks in the regulatory process.  This hearing will seek answers that lead to reforms and ultimately create jobs.