There is a belief among many that the United States can't compete in manufacturing. Media reports focus on abandoned factories and jobs going overseas. You would almost think that America just doesn't make things anymore.
The facts show that America is still the world's greatest manufacturer. While China makes about 15 percent of the world's products, the U.S. still has a clear lead making 21 percent of goods worldwide. Nine percent of Americans are directly employed by the manufacturing sector, that's 12 million workers.
Manufacturing continues to be vital to the American economy. While the impression that we've lost our lead may not be true, American industries do have it rough right now. According to one index, last month was the first to show any growth in manufacturing after five straight months of decreases.
Certainly international competition in manufacturing is fierce. Rising economies have the tremendous advantage of cheap labor. They also have huge disadvantages that aren't often discussed. Corruption, confusing laws, and lack of modern infrastructure makes working in the developing world a risky proposition. High quality industries need qualified workers and reliable infrastructure.
While the United States is still an attractive location for manufacturing, we have to work to keep it that way. This week, the Washington Post reported that federal regulations have risen dramatically in the last two decades. Most of this regulatory burden has fallen on manufacturers.
Major federal regulations are classified as those costing the economy $100 million or more. In the Clinton administration there was an average of 27 major new regulations per year. This average rose to 35 under President Bush and now has climbed to 44 per year under President Obama. In just the past ten years, the regulatory burden on manufacturers has climbed from $80 billion to $164 billion.
Astonishingly, this doesn't even account for all regulations. According to the report cited by the Post, the government hasn't calculated costs for 21 of 166 major rules affecting manufacturers.
Regulations are supposed to flow from the law. Congress passes legislation, the President signs it, and then government agencies write the detailed regulations. When these agencies stray too far from the law, they can be taken to federal court and the regulations may be struck down.
The Obama administration has had a poor record of defending their regulations in court, particularly those at the Environmental Protection Agency. Just this week, the Circuit Court of Appeals for the D.C. Circuit, struck down new regulations on electric generation. At least 500 workers will remain on the job in Texas because of the decision.
This marks the sixth time that the Obama administration EPA has had one of their rules struck down. Overall, the administration has had 15 regulation overruled by the courts.
At the beginning of his term, President Obama set out to change the law and create a vast new cap and trade scheme to regulate power plants and manufacturers. That plan passed the House, despite evidence that it could have cost the American economy $3 trillion. Even though President Obama had a filibuster-proof majority in the Senate, his own allies declined to vote for a bill that almost certainly would have reduced unemployment in the midst of a recession.
Instead of giving up, the White House has tried to advance its agenda through regulation. This isn't just a bad idea; it's against the law.
Now, more than ever, we need American businesses and manufacturers to grow and get our unemployed citizens working again. Many companies are barely scraping by, and when federal regulators place an increased burden on them, they take away resources that could be used to expand business and hire workers.
The 16th District is known for its pristine farmland, but we're also a center for manufacturing. Indeed, our area makes the case that you can have both side by side. We need good regulations to make sure we are not spoiling the natural world we've been blessed with. However, good regulations don't come from bureaucrats who unaccountable to the American people.
Last year, the House passed the REINS Act, legislation to require Congress to give final approval to major regulations. Congress, just as much as the courts, needs to make sure that agencies are following the law and not their own agendas.