Saturday, August 4, 2012

Stifling Business

Often someone will observe that government regulations are stifling business, but it's sometimes unclear as to exactly how and why. Rep. Tom Price has a column in the Washington Times in which he dots the i's and crosses the t's.
The cost is $1.75 trillion. That’s the price of complying with Washington red tape — and that’s not a misprint.

While the federal government has the responsibility to establish reasonable regulations to help protect the American people, federal rule-making is so costly and cumbersome that it actually impedes job creation and economic growth.

That grim reality comes into focus when one looks at the Federal Register, the official compilation of federal regulations. It’s only July, yet this year’s edition already is 41,662 pages long. Complying with these new rules will cost $55.6 billion and require 114.1 million paperwork hours to complete. That is money and time lost on unproductive activity — all done to avoid the punishing arm of an intrusive federal government.

President Obama boasts that he has taken major steps to improve America’s regulatory climate. The truth is that his administration has expanded the federal government’s reach and oppression. He has instituted four times the number of major regulations of President George W. Bush, and they cost five times as much.

A “major regulation” is one that federal agencies estimate will create an economic impact of more than $100 million annually. Since taking office in January 2009, Mr. Obama has instituted 106 major new federal regulations, adding more than $46 billion in compliance costs for American families and businesses. That’s $46 billion taken out of a productive economy. No wonder jobs aren’t returning.
Follow the link for specific examples of regulations that are making it economically impractical for companies to hire new workers. Here are two of the biggest:
One of the most egregious red-tape initiatives of this administration is the Dodd-Frank law. According to the House Committee on Financial Services, just 224 of Dodd-Frank’s 400 rules have been written, and they already consume 7,365 pages. It will take job creators 24.2 million hours every year just to comply with the first half of Dodd-Frank regulations.

Another outrageous example is the president’s health care law, which greatly expands the government’s reach into every American’s life. This disastrous law will result in a minimum of $17.1 billion in regulations imposed on the private sector and $7.2 billion in compliance costs borne by the states.
Add to the regulatory burden the highest (or second highest) corporate tax rate in the world (35%) and it's little wonder that real unemployment continues to hover around 15%. That number could be substantially reduced with a few strokes of the presidential pen, but it'll never happen as long as Mr. Obama occupies the White House. High taxes and onerous regulations are embedded in his political marrow.