The Burden of Regulation

A House Republican seeks out the facts.

Katrina Trinko
Thursday, February 10, 2011

In November, House Oversight and Government Reform Committee chairman Darrell Issa (R., Calif.) reached out to around 150 business leaders with a simple request: Let the government know what regulations are hurting your ability to create jobs.

Today, armed with nearly 2,000 pages of responses from around 200 businesses and trade groups, Issa will conduct a hearing focused on how regulations impact companies’ hiring decisions.

“We are doing this in an effort to collect information and make it available so that policymakers and the American people alike can determine for themselves the merits of the arguments that these private entities are making,” says Issa spokesman Kurt Bardella.

“We oftentimes hear these anecdotal examples, the rhetoric that regulations are job killers,” adds Bardella. “This was an opportunity for businesses to put their money where their mouth is, to give us concrete, substantive examples of how regulations are impacting their ability to create jobs.”

But the hearing will also throw down a gauntlet to President Obama, who has been sending mixed messages on regulation in recent weeks. As part of his post-election repositioning as a centrist, he ordered a government-wide review of regulations and, in a January Wall Street Journal op-ed, supported the removal of “outdated regulations that stifle job creation and make our economy less competitive.” Obama reiterated this theme in his State of the Union speech, saying that “when we find rules that put an unnecessary burden on businesses, we will fix them.”

Yet a White House official told the Wall Street Journal last month that the review would almost certainly have no impact on regulations mandated by Obamacare or the financial-reform law. And Obama has been careful to pair his statements on burdensome regulations with bromides about the importance of regulations to consumers.

However, Issa is confident that the high unemployment rate will force the president to seriously tackle excessive regulation. “I don’t think anyone on either side of the ideological spectrum, or on either side of Pennsylvania Avenue, can challenge the unfortunate reality that the [current] pace of job creation is not enough to address the unemployment [rate’s] being above 9 percent for too long,” says Bardella.

Issa also faces opposition from Maryland representative Elijah Cummings, the top Democrat on the committee. “There must be a reasonable balance between job creation, which we all support, and regulatory measures that provide core protections to the American people,” said Cummings in a statement.

Even if the Obama administration ultimately punts on a serious rollback of existing regulations, many businesses would be relieved if the federal government would simply cease adding new ones. Regulations from different agencies accumulate, leaving businesses with a larger overall regulatory burden than any one particular agency may be aware of.

Among the witnesses for the hearing are business leaders who will have real credibility when discussing the impact of regulations on companies. Those leaders include Jay Timmons, CEO of the National Association of Manufacturers; Harry Alford, CEO of the Black Chamber of Commerce; and Karen Kerrigan, president of the Small Business and Entrepreneurship Council. Also speaking will be a couple of think-tank experts, the Mercatus Center’s Jerry Ellig and the Heritage Foundation’s James Gattuso.

And don’t look for today’s hearing to be the final statement from House Republicans on regulation. Rep. Fred Upton (R., Mich.), chairman of the House Energy and Commerce committee, has unveiled draft legislation that would ban the EPA from regulating greenhouse gases under the Clean Air Act. Rep. Geoff Davis (R., Ky.) has reintroduced the REINS Act, which would require a congressional vote to launch any regulation estimated to have an economic impact over $100 million.

“We see this as the beginning of the conversation,” says Bardella. “Not the last word.”