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Red Tape Reduction and Small Business Job Creation Act

Floor Speech

Location: Washington, DC

Ms. HIRONO. Mr. Chair, last week the House considered H.R. 4078, the Regulatory Freeze for Jobs Act. Like the REINS Act and other similar legislation this chamber has considered--and I have opposed--the Regulatory Freeze for Jobs Act (H.R. 4078) would prevent federal agencies from developing and implementing regulations that protect public health, consumers, and our environment.

One of the majority's primary arguments for this bill is that regulations kill jobs by making it hard for businesses to do what they need to do to succeed. In the current economy, this sounds plausible. Unfortunately, the facts and data do not support this claim.
Since 2007 the Bureau of Labor Statistics (BLS) has asked businesses that have laid off large numbers of workers what caused them to make such layoffs.
According to the BLS's survey data government regulations contributed to only 0.2 percent of layoffs in 2009, 2010 and through the first half of 2011.

Instead, the BLS found that the number one reason companies made mass layoffs was because of reduced demand for their products or services from consumers.

Surveys conducted by the American Sustainable Business Council, the Main Street Alliance, and the Small Business Majority also found that lack of demand is the primary challenge facing businesses today--not regulations.

One of the other arguments the majority has advanced to support their claim that regulations hurt the economy is that there will be ``unintended consequences.'' Again, this sounds plausible given the state of our economy.
But again, this assertion does not hold up against the facts.

Take, for example, the Clean Air Act and the regulations that resulted from the law. In 1990, Congress passed the Clean Air Act Amendments on a strong bipartisan basis. Despite concerns raised by industry over the cost of the rules mandated by the law, the decade following its enactment was a great time U.S. businesses. The economy created 21 million jobs, and we had the longest period of sustained economic growth in national history.

In fact, since passage of the initial Clean Air Act over 40 years ago, our economy has grown by over 200 percent. At the same time, we have improved the nation's air quality and the health of the American people by reducing toxic and health threatening air pollutants by 60 percent. The estimated economic benefits from lower health care costs, less illness and premature death, and increased worker productivity of the Clean Air Act are expected to reach the $2 trillion mark in 2020. This exceeds the projected costs of implementing the regulations by more than 30 to 1.

We can also look at the recent financial crisis as a cautionary tale of the ``unintended consequences'' of not having appropriate safeguards put in place.

In 1994 Congress gave the Federal Reserve authority to regulate subprime and other high risk mortgages. It took them until 2008 to do anything with that authority. Unfortunately, 2008 was too late to prevent the housing bubble that popped and set off a financial crisis that cost American families $6.5 trillion in household wealth, millions of jobs, and required significant resources from the federal government to address.

Even former Federal Reserve Chairman Alan Greenspan admitted to the House Oversight and Government Affairs Committee in 2008 that he'd been wrong about the housing bubble and should have done more.

These stories illustrate the importance of responsible environmental and consumer protections to a strong economy, strong communities, and healthy families. Yet none of this information or experience seems to have had any impact on the majority.

In fact, the bill today would likely delay regulations like the mercury and air toxics rule. According to estimates, each year that we delay implementing this rule means 17,000 premature deaths, 120,000 cases of asthma, 12,200 hospital and emergency room visits for respiratory and cardiovascular disease, and 850,000 days of missed work and school due to illness.

In addition, every year approximately 1.2 million people get sick, 7,125 people are hospitalized, and 134 people die from foodborne illnesses attributed to contaminated produce. Enacting this bill would halt progress on implementing the Food Safety Modernization Act to reduce these contaminations and protect our families.

The Regulatory Freeze for Jobs Act would arbitrarily freeze all regulations until unemployment is below 6 percent, prevent regulations from being developed and implemented during presidential transitions, expose regulations to court challenges that will increase uncertainty, and make other changes to procedures for developing and implementing regulations.

These changes would primarily accomplish one thing--undermining the government's ability to do its job efficiently and cost effectively.

The Congressional Budget Office (CBO) found that these changes would freeze routine updates to programs like payment rates for services to Medicare patients. This would have a negative impact on doctors and seniors.

CBO also estimates that the legislation ``would have a significant effect on direct spending'' because laws could not be implemented properly--unnecessarily increasing the deficit.

H.R. 4078 would also give regulated industries the ability to influence rules behind closed doors by requiring that agencies consult with private industry stakeholders before proposed rules are made available for public comment. The changes made under this bill would also allow regulations to be challenged and delayed, increasing uncertainty for businesses and the economy--which seems to run counter to the majority's primary argument for the bill in the first place.

This bill also ignores the work that the Obama Administration has been engaged in to review current regulations in order to eliminate outdated, obsolete, and ineffective rules. The President placed a premium on getting feedback on this effort from the public--including the business community. As a result paperwork burdens, unnecessary or outdated rules, and barriers to exporting and other job creating activities have been or will be eliminated. These changes are projected to save taxpayers billions in the coming years.

Now is not the time to put the brakes on this effort, which has been open, transparent and appropriately balances the need for responsible safeguards for consumers, the environment, and public health with the need for a strong and growing economy.

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