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Hearing Examines Consequences of Excessive Federal Regulations and Spending

Press Release

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Location: Washington, DC

The House Committee on Education and the Workforce, chaired by Rep. John Kline (R-MN), today held a hearing entitled, "Expanding Opportunities for Job Creation." The hearing examined ongoing challenges affecting the strength of the American workforce, the need for smarter federal regulatory policies, and the demand for pro-growth solutions such as job training reform.

"Simply put, we are experiencing the weakest recovery since the Great Depression," said Chairman Kline. "As the Wall Street Journal recently noted, the recovery of the 1980's led to 18 straight months of growth greater than 5 percent. Yet our own recovery over the last two and a half years has averaged just 2.5 percent. The nation should be firing on all cylinders, yet our economy remains stuck in neutral. In many ways, the current administration has made matters worse by promoting the politics of fear and uncertainty."

Ms. Kellie Johnson, president of a small manufacturing company in California, echoed Chairman Kline's concerns. "The uncertainty of our regulatory and economic environments makes it almost impossible for short or long-term business growth, especially for a capital intensive industry like manufacturing," Ms. Johnson testified. "As a result, my customers may make the decision to migrate to places they believe care more about manufacturing."

Ms. Johnson cited specific regulatory initiatives by the National Labor Relations Board and the Occupational Safety and Health Administration. Explaining the impact this regulatory environment has on job creation, Johnson stated, "To be compliant with the newest regulations and rules takes time away from running the day-to-day operations of a business. Resources are constantly rerouted away from customers, resulting in lower productivity and lower customer satisfaction."

The onslaught of new regulations is just one challenge facing American businesses. Federal spending continues to spiral out-of-control. Despite the fact that our national debt has eclipsed the size of the entire U.S. economy, Democrats in Washington continue to call for more "stimulus' spending. Dr. Matthew Mitchell, senior research fellow with the Mercatus Center urged caution. "I cannot tell you what level of risk is acceptable to take with the American economy," he said. "But further stimulus at this point is indeed risky. In fact, there are compelling reasons to expect it would do more harm than good."

Instead of temporary fixes that push our economy into a more precarious position, Dr. Mitchell said, "We should be creating the conditions that are necessary for long run economic health; we should be enhancing economic freedom. This means that regulations should be informed by sound analysis to ensure that they do not detract from or divert human capital into unproductive uses."

Across the country, some states are advancing their own reforms in an effort to build a better environment for job creation. Michigan Governor Rick Snyder told the committee his state has "embarked upon an aggressive initiative to reinvent our state's regulatory system. Excessive and burdensome regulations have long served as an impediment to job creation and economic growth. By launching an Office of Regulatory Reinvention to review and streamline regulations, we are establishing a culture in state government that emphasizes customer service above all, and is more conducive to business growth and job creation."

Governor Snyder also described the importance of revamping the federal job training system, noting reform provides an "important opportunity for partnership with states to aggressively address the realities of the 21st century economy and job training" and "create a demand-driven workforce system that cultivates a labor force possessing the necessary skills employers require."

The governor also recognized efforts by House Republicans to create a 21st century workforce investment system that better meets the needs of today's workers and employers. Last year, House Education and the Workforce Committee members introduced three pieces of legislation that lay the foundation for a leaner, more accountable job training system. Additionally, the committee has taken steps to engage the administration in the process, sending a letter to Labor Secretary Hilda Solis this morning that describes the new proposals and asks for more details about the president's latest call for "one program" to serve America's job seekers.

"Streamlining these [job training] programs will enhance support for workers, offer a better trained workforce for employers, and promote better use of taxpayer dollars," Chairman Kline concluded. "I encourage all members, on both sides of the aisle, to stay engaged, offer positive solutions, and work to find common ground."


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