Americans for Prosperity - Adam Berkland
Yesterday the President’s Office of Management and Budget (OMB) released a report touting the virtues of federal regulation – in many cases, they found, the net benefits of federal regulations outweigh their associated costs. This is unsurprising and even desirable: we want laws on our books that improve the overall well-being of American citizens, so long as those laws do not obstruct freedom or impose disproportionate costs on the economy.
The danger is that the Obama administration will use these findings to justify further forays of regulatory intervention into the economy. The President has already led an immense expansion of the regulatory state – including new rules on greenhouse gas emissions, health insurance, and financial products, among others – perhaps the most rapid in our country’s history.
America’s job creators are already vastly overburdened with rules, regulations, and red tape, and, if anything, rules need to be taken off the books. A recent report from the Small Business Administrationshowed that the cost to comply with federal regulations was over $1.75 trillion in 2008, with a disproportionate share of that burden falling on the nation’s small businesses. This “hidden tax” cost a full 21 percent more than the combined sum of all individual and corporate income taxes that year. Small businesses, moreover, are clamoring for regulatory relief: small business owners consistently list government red tape as one of their top concerns, and nearly a third of owners cite regulatory burdens as one of the most significant challenges to their businesses’ growth and survival.
Most importantly, the costs of federal regulation have a substantial and negative impact on employment. The OMB report falls all over itself while trying to dance around the issue, marshalling as much evidence as they can from academics in support of their case, but ultimately concluding that the impact on jobs is too “complex” to “generalize.” But a recent study from the Phoenix Center finds an unambiguous conclusion on the issue: a reduction in the federal regulatory budget by just 5 percent would create 1.2 million private sector jobs each year. Every time the government hires just one new federal regulator, 98 private sector jobs are destroyed.
The simple fact is that more regulation puts more Americans out of a job, and right now we’re stuck with an intolerably-high 9.1 percent unemployment rate. Before forging ahead with their over-bearing regulatory state, the Obama administration should ask the well over 20 million Americans who are either unemployed, underemployed, or discouraged from looking for work all together how many more federal regulatory “benefits” they think the American economy can afford right now.
