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Hearing of the House Judiciary Committee - The Obama Administration's Regulatory War on Jobs, the Economy, and America's Global Competitiveness


Location: Washington, DC

Chairman Goodlatte: Since the November 2012 election, the Obama administration has moved into overdrive in its regulatory war on jobs, the economy, and America's global competitiveness.

Let me be clear. Congress cannot sit silent while America's economic growth is imperiled. One of my top priorities in this Congress will be to do everything possible to reduce the regulatory burdens that our nation's small businesses are facing, to get more Americans back to work, and to help grow our economy.

A study last summer by the Organization for Economic Cooperation and Development revealed that after measuring countries by the number of regulations they have, "it is now easier to start a business in Slovenia, Estonia and Hungary . . . than in America."

According to former CBO Director Douglas Holtz-Eakin, countries from England, to South Korea to Portugal have already undertaken regulatory reforms. England has been particularly aggressive, adopting a "one in two out" rule for new regulations, which requires policymakers introducing a new regulation to rescind or modify an existing regulation that costs double so the total regulatory burden is actually reduced.

The governments of our international competitors are not merely paying lip service to lightening the regulatory load, they are taking meaningful actions. We seem to be moving in the opposite direction.

Last fiscal year, the total U.S. paperwork burden grew by more than 355 million hours, or four percent.

A 2012 report by NERA Economic Consultants on the regulations affecting the manufacturing sector found that exports in 2012 might have been as much as 17% lower than they would have been without the estimated regulatory burden. Such loss in output directly represents lost jobs and economic opportunities.

Instead of the regulatory burden diminishing to keep American businesses competitive and hiring, experts expect the pace of regulation to increase in President Obama's second term.

Just prior to Election Day, the National Journal reported that "[f]ederal agencies are sitting on a pile of major health, environmental, and financial regulations that lobbyists, congressional staffers, and former administration officials say are being held back to avoid providing ammunition to Mitt Romney and other Republican critics." Now the floodgates are open. For example, the Patient Protection and Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act created a host of regulatory obligations which agencies have yet to fulfill.

Similarly, the American Action Forum identified $123 billion in possible regulations in the Administration's 2012 Unified Regulatory Agenda that would also add more than 13 million hours of paperwork burden. It is no wonder the Administration delayed releasing this agenda, and its plans for 128 new "economically significant" regulations until after the election.

What is most striking perhaps is this Administration's insensitivity to the negative effects overregulation has on vulnerable groups. Overregulation costs Americans jobs and a new study shows agencies' cost benefit analyses fail to consider that over 75% of older workers who lose their jobs remain unemployed three years later and those who can find work frequently must accept as much as 20% less pay.

Overregulation also disproportionately burdens low-income households. Because of the law of diminishing returns, new regulations require spending increasingly more money to mitigate increasingly smaller risks. Many of these costs are passed down to consumers. New research from the Mercatus Center shows low income households would be much better off spending this money mitigating more immediate personal risks, for example, by using money that should rightfully be theirs to afford rents in safer neighborhoods.

In light of these very real trade-offs, I am deeply concerned that some pro-regulation advocates are calling for an Executive Order to "rescind requirements" that there be cost-benefit analyses of significant regulations. I hope that stories from Main Street about the negative impacts plant closures have on lives and communities will help sensitize regulators and their allies to the very real suffering that even well-meaning regulatory advocacy can impose.

However, we cannot rely on hope to turn the tide of excessive regulation. I am committed to restoring accountability and providing relief from excessive regulation to our nation's small businesses and job creators who need it most.

Last Congress, the Committee reported a number of important and far-reaching bills to reform overregulation, ease the burden on jobs and the American economy, and restore America's competitiveness. The House passed them all, but the Democrat-led Senate refused to act and President Obama threatened to veto them.

The overreach of Obama administration regulations is one of the chief reasons the economy has failed adequately to recover and produce new jobs throughout the Obama administration. Congress and the President must act to take a different direction that will allow America's jobs, economy, and competitiveness to be restored. The House will do its part, and for the sake of our economic future, I call on the Senate and the Obama administration to do theirs.

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