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Obama Fails to Follow Through with Punch at Regulations


Posted by Billy Gribbin on Tuesday, January 18th, 2011, 3:24 PM PERMALINK


Today the Wall Street Journal published an op-ed by Barack Obama.  In his article, the President made a case for cutting through the mishmash of federal regulations now entangling our economy.  To this end, he said, he is signing an executive order which calls for the simplification or elimination of the most troublesome of these agency mandates.

While this gesture is a step in the right direction, the President’s words failed to communicate an abiding desire for principled reform.  He has stopped short of committing himself to downsizing the federal government in its most harmful, expensive, and power-hungry sectors.  Before we reach that discussion, however, it’s only fair to point out what he got right:

America’s prosperity originates in a free market.

For two centuries, America's free market has not only been the source of dazzling ideas and path-breaking products, it has also been the greatest force for prosperity the world has ever known. That vibrant entrepreneurialism is the key to our continued global leadership and the success of our people.”

Our free market is hampered by unnecessary federal regulations.

“Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs.”

The federal regulatory system is a confusing mess and it needs to be simplified.

“We're also getting rid of absurd and unnecessary paperwork requirements that waste time and money. We're looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation. And finally, today I am directing federal agencies to do more to account for—and reduce—the burdens regulations may place on small businesses.”

These sentiments are good ones.  They show that the President is not so out of touch with the country as to deny the problems that have arisen from constant regulatory expansion.  Unfortunately, he muddles his message by pulling his punches: these omissions betray a lingering ideological split as to the proper role of American government. Here’s what he got wrong:

The market is not suffering from over-regulation per-se, just the wrong methodology.

“But creating a 21st-century regulatory system is about more than which rules to add and which rules to subtract. As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends—giving careful consideration to benefits and costs.”

The truth: Bureaucratic mismanagement and unrealistic requirements are symptomatic of a larger problem: federal appointees thinking they have the right to regulate anything they want, wherever they want, whenever they want.  There are some things Washington should have nothing to do with, even after a cost/benefit analysis.

Recent federal regulations save a lot of money.

“Despite a lot of heated rhetoric, our efforts over the past two years to modernize our regulations have led to smarter—and in some cases tougher—rules to protect our health, safety and environment. Yet according to current estimates of their economic impact, the benefits of these regulations exceed their costs by billions of dollars.”

The truth: The U.S. lost $1.75 trillion dollars from federal regulations in 2010.

The EPA’s new rulings on autos are exemplary regulatory policy.

“The EPA and the Department of Transportation worked with auto makers, labor unions, states like California, and environmental advocates this past spring to turn a tangle of rules into one aggressive new standard. It was a victory for car companies that wanted regulatory certainty; for consumers who will pay less at the pump; for our security, as we save 1.8 billion barrels of oil; and for the environment as we reduce pollution.”

The truth: The EPA’s move to regulate greenhouse gas emissions from motor vehicles (and other sources) will result in absurd amounts of paperwork and compliance costs. In addition, the EPA’s “fix” constitutes a blatant usurpation of powers delegated to congress alone.  The Agency’s new ozone standards will reduce GDP by 5.4 % and kill 73 million jobs, while its “MACT” rules for commercial and industrial boilers will cost billions in investment dollars.

While it is evident from President Obama’s piece that he wants to smooth out regulatory bumps in the road, his true beliefs inevitably reveal themselves: as long as there aren’t too many problems, the government should quietly control whatever it can get its hands on.  In justifying his position Obama conveniently forgets facts like the ones listed above, and misses the entire thrust of current popular opposition to government expansion.  Even if everything functioned well through government control (which it doesn’t), such control would still be an affront to the Constitution, free enterprise, and the right of an American citizen to use his property as he wishes. 

If the President wants to show he’s serious about pulling the nation out of its economic slump, he should put an indefinite hold on the myriad of problematic rulings his appointees are constantly producing.

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