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  • Morning Bell: Obama's New Regulations Cost Billions

    If you fly across the country, it’s easy to see signs of America’s ingenuity and productivity — skyscrapers in New York City, steel mills in Pennsylvania, factories in Chicago, farmland in the Great Plains, and the glittering technology of Silicon Valley. But what you can’t see, though it’s very real, is the invisible web of red tape crawling forth from Washington, crisscrossing the landscape, strangling job creators, tying down entrepreneurs, and tangling America’s engine of innovation in a mess of regulations. Under the Obama Administration, those endless miles of government-imposed directives has kept getting longer, as The Heritage Foundation reveals in a new study released today.

    In our “Red Tape Rising: Obama-Era Regulation at the Three Year Mark” report, James Gattuso and Diane Katz detail how the Obama Administration has imposed new regulations costing $46 billion annually, with nearly $11 billion more in one-time implementation costs. That is about five times the cost of regulations imposed during the first three years of President George W. Bush’s administration, but the burden is even higher. The red tape of the past three years helps explain why the economic recovery has been so slow and job creation so anemic.

    Don’t take our word for it, but those of President Obama himself. In January 2011, he said that “rules have gotten out of balance” and “have a chilling effect on growth and jobs.” And he’s right. Where the President breaks with reality is his pledge for a get-tough policy on overregulation and a comprehensive review of regulations imposed by Washington. In fact, to hear President Obama tell the story, you would think he’s a champion of slashing red tape and that his Administration has set its sights on slashing overregulation.

    Just two months ago, in his 2012 State of the Union address, President Obama claimed that “I’ve approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his.” But looking at the sheer number of regulations doesn’t begin to tell the story. While it’s true that the Obama Administration approved 10,215 regulations in its first three years, just slightly less than Bush’s 10,674, it’s important to look at what those regulations are and their impact on the American people and industry — and how their costs have vastly overshadowed those of the prior administration.

    Over just the last year, the Obama Administration has added 32 regulations that together impose more than $10 billion in annual costs and $6.6 billion in one-time implementation costs. Those regulations include mandates covering a broad range of activities and products, ranging from refrigerators and freezers to clothes driers to air conditioners, limits on automotive emissions, employer requirements for posting federal labor rules, product labeling, health plan eligibility under Obamacare, and higher minimum wages for foreign workers. The most expensive regulation came from the Environmental Protection Agency, which added five major rules at a cost of more than $4 billion annually.

    Gattuso and Katz write that this tide of regulation isn’t going to end any time soon thanks to the new regulations expected under the Dodd-Frank financial regulation law, Obamacare, and the EPA’s carbon-emissions-cutting crusade. Unnecessary regulations, they write, are a threat to America’s already-weak economy and much-needed job creation:

    In much the same way that high taxes hamper investment and innovation, escalating regulatory costs undermine the American economy. Small businesses in particular are under siege. When surveyed in December 2011 about their single biggest problem, 19 percent of respondents cited regulations and red tape, up from 15 percent a year ago, and more than any other category except for “poor sales.”

    But regulations are not just a problem for entrepreneurs. American workers and their families have been hit hard by the persistent lack of job creation that results, in part, from regulatory excess. Meanwhile, regulatory costs are passed on to consumers in the form of higher prices and limited product choices.

    What’s to be done about the explosive growth of red tape? Gattuso and Katz call for additional congressional oversight, writing that it is necessary to protect Americans and the economy from overregulation. Congress should require congressional approval of new major rules promulgated by agencies, establish a congressional office of regulatory analysis in order to provide a non-partisan analysis of the cost and effectiveness of regulations, and establish a sunset date for federal regulations in order to ensure that substantive review of existing regulations continually occurs.

    On top of the thousands of regulations the Obama Administration has already implemented — costing America billions of dollars — more are on the way, promising to continue to drag down the economy and hamper job growth. Congress can and should take action to get this regulatory burden under control so that Americans can be free to get the country’s economic engine moving at full throttle once again.

    *Click here to read Heritage President Ed Feulner’s op/ed on rising regulations in today’s Washington Times.

    Quick Hits:

    Posted in Economics [slideshow_deploy]

    55 Responses to Morning Bell: Obama's New Regulations Cost Billions

    1. Not entirely sure if the figures stated – $46 billion with an addtional $11 billion to follow – but what I do know is that we're going in the exact opposite direction that we should in regards to government involvement and regulation. Anything and everything the government gets involved in automatically and immediately becomes significantly less efficient while becoming significantly more expensive…at at a time when the economy (both the US and Global) is struggling to rebound, it's counter-intuitive to be instituting any more regulations on anything that could hinder the economic recovery…

    2. avery brinkley says:

      It is my understanding from a reliable source that Obama is having Yale liberal professors rewrite the Constitution and Bill of Rights in prep for his reelection.

    3. Hilda Morris says:

      Please explain to me why the "costs" of regulations are NOT "spending" that's included in the GDP and boosting hiring. Then show me the EVIDENCE that this is so.

      Seems to me that regulatory "costs" are simply social choices made by a nation based on what kind of living conditions they want to have, and that regulatory costs can contribute to economic vitality, too.

      I'm really TIRED of politically-motivated fear-mongering.

      1984's language-manipulation is well and flourishing in our political sphere, and YOU are a part of it.
      But that does not make the spin TRUE.

      • At least your reasonable comment wasn't "vetted", thankfully. The spin makes readers dizzy.

      • Wayne Peterkin says:

        Let me see if I understand you. The fact that the government decides to impose costly regulations is somehow justified by the nation's social choices? That special interests pushing for many regulations are somehow supported by the public regardless of the cost? What part of this article is "fear-mongering". The fact that Billions are being spent of this and it is throttling job creation?

      • Wayne Peterkin says:

        Let me see if I understand you. The fact that the government decides to impose costly regulations is somehow justified by the nation's social choices? That special interests pushing for many regulations are somehow supported by the public regardless of the cost? What part of this article is "fear-mongering"? The fact that Billions are being spent on these regulations and it is throttling job creation?

      • Richard in Portland says:

        Suppose you want to buy a loaf of bread but have no money. Consider these two options. (1) You charge it to your credit card or (2) you work an hour for the baker and he calls it even.

        If you choose option (1), you get to eat the bread but you still owe the money (to the bank instead of the baker). You have fed yourself but you have just added the expense of the loaf to your overall debt.

        If you choose option (2), your hour of work makes you even with the baker. The debt is paid by your labor so your labor becomes something of value that creates wealth.

        Wealth creation requires that something be sold at a profit (goods, services, or ideas). Paying government employees to administer regulations does not sell anything so it is ONLY an administrative expense. And because it is an expense, it actually SUBTRACTS from the wealth of the nation.

        One thing more… before you can pay any government employee you first have to tax the citizens for the money. So if you add a government employee and pay her $50,000 a year plus benefits, you first have to take that amount of money from the citizens (you and me). There is simply NO WAY to argue that adding layers of regulations is good for the country.

      • stephen says:

        Hilda,
        I'm in agreement with you, but I would like to say this used to be a great opinion piece to read daily, now it's become a talking point for the, who knows anymore, the Conservatives, the Tea party, I wish the writers could get back to writing for America and leave the sound bites for the Dog wagging group alone.

      • Stirling says:

        "Costs"of regulation compliance is money that would normally go toward a company spending money to hire new employees, or creating a better product. It may employ more tax-prepers, but it subtracts from "disposable income" that a company has to grow. Any product that you purchase also has additional costs (due to regulations) added into the price. The less regulations the lower the price for a product would be..

        So regulation is a "negative" to economic vitatlity, because it subtracts from a companies growth.
        Lastly the "Social choices" should be an individual choice that people make. When government regulates it's government coercion. (which is tyranny).

    4. RG Schmidt says:

      I get the point about the type and scope of regulations being more important than the number, but think about it; more than 3,000 new regulations every year, no matter who's president. Add to that those that are mandated by individual states … Wow, talk about government interference.

      "for additional congressional oversight" That won't happen until we replace a large number of invertebrates in Congress.

    5. Hilda Morris says:

      Please explain to me why the "costs" of regulations are NOT "spending" that's included in the GDP and boosting hiring. Then show me the EVIDENCE that this is so.

      No spin, please. If your argument is valid, then you shouldn't have to scare people or impute evil to Obama or anyone else. You should simply be capable of marshaling evidence and logical argument.

    6. Hilda Morris says:

      Please explain to me why the "costs" of regulations are NOT "spending" that's included in the GDP and boosting hiring. Then show me the EVIDENCE that this is so.

      Please also explain why, if the regulations are applied fairly and business do not break the law, those costs are not absorbed by the business or passed on to consumers, eventually constituting the price we, as Americans, pay for the choices we make (through our government) about the conditions in which we want to live.

      We're WILLING to pay for clean air, clean water, safe pharmaceuticals, safe meat and produce, public parks, playgrounds, and libraries, and honest oversight of the corporate thieves on Wall Street and elsewhere.

    7. Paula Glidden says:

      Let us all realize that this is the 'mission' of the Obama administration: regulate the economy into failure to put everyone on the governments dole. The problem with that is, who will pay for everything, then? It's not too long before as Margaret Thatcher says, the problem with socialism is that pretty soon you run out of everyone else's money. What would Obama do differently if he were trying to kill the economy.

      • stephen says:

        Seems to me Paula that the Bush Admin did just what you described regulated the economy right into the ditch, I mean failure!

        • Archangel Mike says:

          …and President Obama has doubled down on those disastrous policies.

          Excellent point!

    8. stephen says:

      Really, Bi partisian effort in Congress to over see the regulatory standards, Please! The current Congress has an approval rating in the very low double digits, you really want to place more resposibility on them?

    9. Jeanne Stotler says:

      Stiflin the economy, using fuzzy math and outright lying, all trademarks of this administration. Already the fuzzy math is promoting BHO's "deeds" as being good, the trouble is they only tell a half of the story and there re a lot of people out there that hang on his everyword and continue to drink his cool-aid never adding the numbers.

    10. gitredy says:

      Mike, thanks for yet again shining the spotlight on the price every American is paying for this Administration's time in the White House…oh, how we count the days! One suggestion: To make the impact of these regs on small businesses even more real, let's identify some real-life examples of businesses, citizens (consumers and job-seekers) directly impacted and the consequences they are feeling…tell the story! Thanks!

    11. http://www.washingtonmonthly.com/political-animal
      http://www.epi.org/blog/regulatory-uncertainty-jo
      http://www.factcheck.org/2011/09/cherry-picking-o
      http://www.bloomberg.com/news/2011-11-29/obama-we

      Your "rag" has lost credibility with thinking people everywhere. Hello! You're on the INTERNET… and generally people know how to "google". there are dozens of sources all acknowledging the truth to matters, meanwhile only yours and fox keep harping on Obama with the same old nonsensical talking points that don't hold water…
      And, "how's that tax break for the wealthy workin out for ya?" http://www.epi.org/news/the-bush-tax-cuts-10-year

      • stephen says:

        @NaturalistBent,
        I think they're talking about the BUsh administration, but the dyslexia allows them to forget his name.

        • Archangel Mike says:

          ^
          |
          +—– Blame Bush….a one trick pony that's been flogged to death. Can't you have an original idea?

      • gitredy says:

        So yeah, how's that "Hopey, Changey thing workin' for ya????" I know you're smiling every time you go to the pump, right?..every time you go to the grocery checkout? every time you lose another freedom, every time some freakin' bureaucrat creates another regulation to slow down businesses, every time you try and "get a job", or is it simply every time your fearless leader bows to some 3rd world crony dictator or some chinese or saudi prince? Which is it?…..Show us that big smile!

      • Stirling says:

        The links that you have posted are mostly liberal sources, which cover only one side of the arguement. If you would have an open mind to the opposing side of the arguement, you may find that your not understanding the whole picture. Please be a bit more respectful of alternative views, as not everyone does or has to share your beliefs. We still live in a country that has free speach protected under our constitution. If you are secure in your beliefs then you should have no reason to resort to name calling, rather add some construtive comments to the debate. Thanks.

      • GBarb says:

        From one of the few "balanced" sources you list – "In its 2011 report to Congress, OIRA reported that the estimated cost of federal regulations under Obama from Jan. 20, 2009, (when he took office) to the end of the 2010 fiscal year was somewhere between $8 billion and $16.5 billion (see Table 1-3 and Appendix D). During the same initial stretch under Bush, the estimated cost of new regulations was between $1.3 billion and $3.4 billion (Appendix D). OIRA inflation-adjusted all figures to 2001 dollars."
        You may want to read the whole article there since you are proving the point that you are arguing against.

    12. haha, I suppose you're "vetting" my comment now. Disingenuous rag you publish here.

      • Ben C. says:

        Keep drinking the kool aid. The truth is that there simply aren't enough rich people to make a difference in the natiiona debt. When you are my age (I am a baby boomer) you will realize the folly of your thinking. I fear for my children and their children – and your children. Socialism works until you run out of other peoples money and then collapse occurs. If you haven't, read the quotation by the Scottish historian Tytler about the collapse of civilizations and governments. We on well on our way.

      • Jeanne Stotler says:

        I don't see anyone forcing you to be part or AMERICAN HERITAGE, if you don't like it then go to some liberal leftist sire and waloow in the Kool-aid.

    13. Jim says:

      George Orwell, where are you? These guys are straight out of your book "Animal Farm" with all their rules and regulations that only seem to apply to "us" and not to "them".

    14. Robert A Hirschmann says:

      So what's new? Anybody with any common sense realizes that Obama is out to destroy America and the American dream. He is totally anti-American. I just can't understand why he hasn't been impeached and tried for treason a long time ago. He is truly "the enemy within".

      • stephen says:

        Mr Robert,
        He has not been impeached because the lies you been reading here and basing your opinion on are not true, Wake up!

        • Robert A Hirschmann says:

          If the lies came from one source, maybe, just maybe I would agree with you. However can 8 million Americans be wrong? He spends OUR money like there is no tomorrow, He totally rejects the Constitution, he lies all the time. He constantly says one thing and does the complete opposite. I am wide awake! How about you?

        • Jeanne Stotler says:

          The reason he hasn't bee impeached is because of Harry Ried, Once the House drew up Articles of Impeachment they heve to go to the Senate and Harry Ried would not allow it ti go to the floor, Hell, he won't even a budget to be heard.

    15. jcaz says:

      Unfortunately, you're preaching to the choir. We must find a way to get report such as this a wider distribution.

    16. bentonmarder says:

      Making regulations and enacting laws are what governments do. They rarely revoke or repeal regulations or laws. The inevitable consequence is a collapse of the whole structure. Further, they suck the air out of any enterprise. It's sort of a 'categorical imperative'. I'm afraid that there is no practical mechanism to reverse the trend. To be sure, 'sunsetting' could be introduced, but the reality is that there is no 'sunset'—the bureaucracy and legislature simply decree a longer day with the sun constantly standing still at high noon. The only solution is totally massive regime change, after which the whole process starts all over again.

    17. Lloyd Scallan says:

      To quote James Bond, "you must be joking" Do we honestly expect THIS Congress to actually "establish" any reasonable means to control this out of control regulation and spending administration? Do we really expect any Democrat to sit on any committee onwhich Republicans sits and then agree to go against their leader Obama? Do we not yet understand what the Democrat Party has become under Obama? But more important, do we not understand that it is Obama plan to destroy our American way of life by collapsing our economy? What we must realize, and realize it now, is that almost every Dem, and some on the other side of the isle, are onboard with Obama's final result to drive this nation into socialism.

      • gitredy says:

        Agreed. This year's election is not just about the Presidency. It's about taking back our country. If we have a Republican pres and the Dems still rule either House or Senate, we'll just have reversed the conundrum. I wonder just how much of the damage already done is actually reversible….

    18. Richard in Portland says:

      We have more government employees with higher pay than ever before in history. If I was a senior government employee and wanted to justify my job and department I would create a lot of new regulations to make my job more important and provide job security. Once the regulations are in place, they have to keep me on the payroll to administer, accept and file the new forms, build new databases and find something meaningful to report. Its a massive ball of yarn and you can't find the end of the thread… congressional oversight is an absolute must!

    19. boberic says:

      There are only two alternatives, 1 Obama is the stupidest man on the planet- or 2- he knows exactly what he is doing. He is not stupid so #2 must be correct. It is right out of alinsky and or Cloward and Piven. Bring the capitalist system down so that it can be rebuilt in the socialist image. And it must be done so slowly that the people don't even know it's happening. Therefore the only way out of this is Vote Obama Out

    20. Bob Godwin says:

      His intent is to bring the USA to its knees. This is all a part of it. There will be no relenting until there is sufficient numbers and leadership spine in the legislative branch to stop it or a new president..

    21. Frank says:

      Obama is just the latest of the big government Statists that have a D or an R after their name, although Obama is probably among the worst since FDR & his misguided "New Deal" that also launched us on this path towards socialism & financial insolvency. There will be little real difference (according to George Soros) if Obama or Romney wins the next election, both are Statists. Romney might slow down the process, but not reverse it. Romney is on both sides of every issue & his deeds done in Mass. as governor (RomneyCare, liberal judges appointed, state paid abortion on demand) speaks volumes. In the GOP race for President, there is only 1 truly small government, Constitution-loving candidate… but the GOP seems deaf to his words & warnings. Most likely the GOP will go the way of the Whigs before, or after, the USA collapses financially.

      • Archangel Mike says:

        Frank, thanks for pointing out this isn't just a D problem, but an R problem as well!

    22. Tony says:

      Typical of Obama is the double speak hypocrisy. His statement regarding regulatory overburden is exactly what is needed and his administration's behavior in the production of excessive regulation is directly in opposition to his words. This is political wizardry. Most American people will hear his words and believe them. Few will check the record of his behavior and hold him accountable.

    23. VA firebrand says:

      What good is it when BHO distains and runs rough shod over the Constitution and Congress.
      He's got to go.

    24. Kyle says:

      I was outraged the moment he won the election, knowing all to well that nothing good was going to come out of his presidency!

    25. J E Houser says:

      He does not realize that the only times there has been a great blossoming of the human minds is when there has been a group of competitive states.

    26. Ben C. says:

      Hilda – what those of your mindset fail to realize that regulations add to the cost of doing business – and you get to pay for it. The compelling problem with regulations can be found in the Gulf Coast and the oil rigs, Companies like Hornbeck Off-Shore are moving singificant amounts of their resoureces to Brazil where off shore drilling is thriving. That means their local employees are out of a job unless they move to Brazil. Hmmm, George Soros is a significant investor in the oil company and Obama sent about 2 billion (as I recall) to Brazil touting "We want to be your best customer." Do you get it?

    27. Joe C says:

      Are we still under the US Constitution? The answer should be " a defient Yes"; however when you look at what Congress (Our Representatives ?) allow and even endorse,, it doesn't look like it……….The Congress is in charge of allowing regulation to continue and grow…if nothing else, de-fund,, programs and even the Presidents allowance… Power of the purse is still a method to control things out of control………..

      The Constitution (the oath to it), must be enforced by our representatives or they are not doing their job, for us….Remember they work for us…………and should be fired if they do not represent us……..end Joe

    28. The Federal government is bad enough to deal with. However, the larger concern for a small business owner, or first time business owner is the local governments. Local governments are the terror for anyone wanting to do the most simple expansion or start up. County and city governments terrorize the people with unrealistic and expensive demands. The demands are inconsistent and not clear to any one. Counties and cities, run by the local yahoos, are a bigger threat to small business than the Federal regulations. Once a business gets a good toe hold, then they get to tackle with the Feds, IRS, EPA, USDA and labor laws. During the Carter years I remember a lot of garage cottage industry in an attempt to stay under the radar. I am seeing this again.

    29. Blair Franconia, NH says:

      Your title's all wrong. It should read: "Obama's Regulations Cost Billions and Billions."

    30. O2BMe says:

      Term limits on congress the same as on the President would help. The longer someone is in office the more corrupt they become and they use the seniority to load bills with earmarks, and make buddy buddy with lobbiests. It also allows them to vote raises for themselves every year. However, this is impossible to accomplish since congress themselves would have to write and pass the bill.

    31. Kevin Ezell says:

      I am not sure that starting a new committee or other Government agency is the best for trying to cut Red Tape. While it is best that any Regulatory Agency be required to show how new regulation is going to effect the bottom line, we all know that numbers can be and have been played with in the past. I would rather see local people chosen by local citzens have more control over these regulations and get it out of the Fedreal or even State governments.

    32. Gary says:

      I find it very scary to think we have come to this point in America. We no longer respect let alone enforce the Constitution. We have an executive in power who abuses executive power to the point of denying congessional and senatorial oversight. We no longer legislate, execute and defend legislative law. We now find ourselves in an ever growing and obtrusive federal government. This is in exact opposition to what our fore-fathers envisioned. We are no longer a republic, but rather a government run and controlled society. The democrats of today have become the socialists of the past. They have been hi-jacked by the far left progressives and this is quite apparent when we look into what has taken place in just the last 3 years. The dems have forced us to the brink of the ending of America as generations have known. It is disgusting.

    33. I have been a health care architect now for 45 years and have seen mountains of regulations destroy our private health care system. Now we face "Obamacare" or Socialized Medicine that will completely wipe our private system off the map. The difference in the regulations being administered by this administration is they are all directed toward taking control instead of "regulating".
      Everything you have in this article is true and has to be stopped or we will all drown under all these regulations. There is one thing you missed that will add millions or even billions to the cost above. What is it costing the taxpayers for the government to file thousands of lawsuits to make sure everyone is abiding by these regulations. How much have the taxpayers paid for the government's lawsuit against the State of Arizona over the immigration issue?

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