Fort Report: Regulations and America's Economy

Statement

The United States Department of Energy (DOE) recently informed a Nebraska manufacturing company that the way it defines one of its products for purposes of regulation might change. This redefinition, in the hopes of enhancing standards for energy efficiency, would significantly impact the company's business operations and its ability to bring the product to market. The real-life implication of a proposed technical regulatory reclassification -- which would likely yield little practical energy savings - is that a highly-skilled, specialized American company would be forced to alter its operations, potentially placing jobs at risk and positioning China to take over this market.

Over the last year, my office has received a growing number of concerns from individuals and businesses about the current regulatory environment. From larger manufacturers to Main Street banks, from farming operations to small business contractors, these regulations are impacting businesses of all sizes. One of the challenges to reviving our nation's economy is the uncertainty businesses are experiencing due to increasingly aggressive and unpredictable government regulations.

While ordinary regulation is an important extension of law for a well functioning society -- protecting public health, worker safety, and a fair and stable business climate -- excessive regulation drives up costs, hurts small businesses disproportionately, and oppresses entrepreneurial growth. It's gotten to the point where one Nebraskan told me of a bid for a construction job that included $125,000 in extra costs in anticipation of government fines. The firm didn't get the job. A farmer mentioned an inspection of his feedlot. Overall he met the standards and there was no problem, except for the ten specialty breed of cattle penned up separately -- the run off from those animals was considered a violation. Small banks which had no role in creating the financial mess on Wall Street are worried that they can't absorb the costs of the emerging financial regulations.

While these and other rules imposed on American businesses from bureaucracies in Washington might be well-intended, if not carefully considered they can have little actual impact on product safety, fair labor standards, and environmental protection -- and impose a significant cost on the businesses that still produce goods used by Americans in their homes and communities.

Reviving our nation's economy will require a more certain business climate. One bill in Congress that I am supporting is called the REINS Act: If a regulatory measure has a cumulative impact of more than $100 million annually to the economy, it would need congressional approval.

Implementing regulations should be guided by a spirit of cooperation, helping businesses into compliance. Providing "safe harbors" with clear guidance to protect good businesses would help instill employer confidence. A reasonable and measured regulatory approach should consider American businesses partners in achieving appropriate protections, rather than adversaries. Bad actors would then stand out. We are all eager for more "made in America" enterprises. This is one important step we could take now to help revitalize our national economy.

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