Creating Jobs: Regulatory Tsunami Impeding Economic Growth

Published: Sep 30, 2010

Author: Array

One of the greatest myths in American politics is that one person can create jobs. Sure, when the economy is strong, the person whose watch it is gets the credit. When the economy is struggling, they get the blame. But let’s be clear and honest, it’s not President Barack Obama who creates jobs. It’s not Harry Reid, the Democratic leader of the Senate. It’s not John Boehner, the Republican leader of the House.

Job creation stems from the innovators and entrepreneurs in our country. And while individual political figures can’t create jobs, the government they direct and the policies they advance can severely impede job creation in America. That’s what’s happening right now.

Recently, the House Committee on Oversight and Government Reform released a report examining the devastating impact that federal regulations are having on our economy’s ability to maintain a steady pace of job creation.

I have spent the better part of my adult life working in private enterprise and I have seen firsthand how the complex, technical and bureaucratic nature of the regulatory process can limit our ability to be innovative and grow.

The bottom line is government isn’t the answer to our nation’s unemployment crisis, but it is the problem and it’s time to get government out of the way of our nation’s job creators.

The report we recently released found that the Obama administration has created a regulatory environment that is suffocating the private sector’s ability to create jobs and grow businesses.

In total, the administration has imposed 75 new major regulations costing more than $380 billion over 10 years.

Right now, there are a number of economically significant regulations in the pipeline, which, if finalized, could result in significant costs on the economy, in some cases, a single regulation will impose a cost of at least $100 million annually on the economy.

Essentially, the administration has presided over a regulatory expansion that has been completely negligent of its economic impact.

But beyond the actual costs of individual regulations, we have found a deeper, more systemic problem with the regulatory process itself that, if allowed to continue unchecked, will have devastating consequences for our nation’s economy.

Simply put, the regulatory process is broken, being manipulated and exploited in an effort to reward allies of the administration such as environmental groups, trial lawyers and unions. The federal regulatory agencies charged with serving as watchdogs over the regulatory process have failed to take meaningful action to address the breakdown in the regulatory development and implementation process.

In one case, the U.S. Department of Agriculture’s Grain Inspection, Packers, and Stockyards Administration failed to conduct a proper economic analysis as required by executive order on a proposed rule that would have significant consequences for the agricultural sector. What’s concerning is that instead of going through the process in a transparent way compliant with existing guidelines, this federal agency tried to do an end-around the process to hide the true economic impact of the proposed rule.

The agency classified the rule to be “significant,” but didn’t even attempt to estimate the total of the costs or benefits of the rule. It provided generalized statements that it “believes potential benefits are expected to exceed costs.” However, this bare-bones analysis “never references potential costs to consumers” as well as other factors that will increase its implementation cost.

Why didn’t the agency bother to do this? Because it turned out the price tag for the agricultural community was $1.64 billion.

The actions taken by the government have real consequences that affect real people.

Robbie LeValley and her family co-own a small business that would have been impacted by the Department of Agriculture’s proposed rule. She said that it would “destroy our small business model, force us to lay off our employees, cripple our ability to market our cattle the way we want to, and limit consumer choice.”

The regulatory tsunami that Obama has presided over has caused job creators to lock down at a time when we need them to expand. There are plenty of good regulations that keep us safe and protect our environment and resources, but at a time when job creation is our nation’s top priority, adding 54,000 pages of regulations to the Federal Register telling small businesses what to do is not the answer.

Robbie and her family’s experience with government regulatory overreach is just one of many examples where the magnitude of government action ignores its impact on the everyday Americans struggling to keep their businesses afloat.

One person may not have the ability to create jobs, but one person does have the ability and authority to ensure that people like Robbie keep theirs.

Issa, R-Vista, represents the 49th Congressional District and is the chairman of the House Committee on Oversight and Government Reform.