Open markets, free enterprise, innovation and entrepreneurship are foundations of economic growth in America. These basic concepts have historically placed America at the forefront of the global marketplace. However, in recent years our economic strengths have been undermined by backward fiscal policies which have stalled the economy and punished innovation.
For example, the gross domestic product (GDP) averaged a 2.8 percent increase for the last seven quarters. By comparison, in the seven quarters following the 1982 recession, the GDP grew by an average of 6.6 percent. The problem remains clear -- government is too big, too intrusive, and too expensive to allow the private sector to fuel economic growth at a rapid pace.
Washington has tied the hands of small business owners and job creators with onerous regulations for too long, which in turn bog down the economy. The Small Business Administration sponsored research by Lafayette College economists Mark and Nicole Crain which estimated Americans were spending more than $1.7 trillion annually just to comply with federal regulations. The same study found a small business with fewer than 20 employees faces a cost of $10,585 in federal regulations each year per worker the business employs. Think about it -- just to start a small business, one would have to spend more than $10,000 to comply regulations before investing in technology, equipment, or training.
To make matters worse, in 2009, the Obama Administration added another 184 regulations which are estimated to cost the economy in excess of $100 million. And all of this comes before the hundreds of new rules still to come under the new health care and financial reform laws.
Removing redundant, harmful, and burdensome regulations is critical to our economic recovery. Committees in the U.S. House of Representatives are actively conducting an audit of existing and pending regulations to identify and address those which are hindering economic growth. Additionally, the House has already acted on several regulations which hurt businesses both large and small, including the EPA's regulation of greenhouse gases and the Federal Communications Commission's regulation of the Internet. Slowing the reach of government by stopping onerous, unnecessary regulations will help address our economic challenges, foster investment, and create jobs.
Moving forward, we must prevent federal agencies from enacting overly burdensome regulations without proper oversight. For example, small towns in Nebraska are spending millions of dollars installing water treatment facilities and electric generation units to comply with EPA standards which continue to be arbitrarily changed regardless the state of science. The towns are purchasing lower emission units because they want to comply with the law, but these arbitrary and inconsistent regulations are bankrupting local governments and increasing costs for residents.
To help curb unchecked federal agency regulation hampering economic growth and job creation, I am co-sponsoring the Regulations from the Executive in Need of Scrutiny Act, or the REINS Act. The REINS Act, with 146 co-sponsors, requires Congress to affirmatively approve any new major rule proposed by the executive branch. Passing this legislation would provide much needed accountability and restraint in an era of out-of-control government.
For more information about spending cuts, the latest developments from Congress, or to sign up for my e-mail newsletter, please visit my website at www.adriansmith.house.gov.