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Red tape hinders private sector job creation

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POSTED: August 7, 2012 10:00 a.m.

If the past few years are any indicator, Fridays are reserved for bad news from the federal government. This Friday held true with a report from the Commerce Department that economic growth had slowed to an anemic 1.5 percent in the second quarter.

While it is hard to bring that 10,000-foot statistic to a more relatable level, consider this: Friday’s report confirms that this is the weakest “recovery” in the post-World War era. Annualized, growth is less than half of the previous nine recoveries. Clearly something is not working.

While the federal government cannot create the kind of jobs we need to get our economy back on its feet, it can create an environment that encourages the private sector to expand and create jobs. The first step to creating such an environment is to quit being a stumbling block to expansion and job creation.

Since the beginning of the year, the federal government has imposed $56.6 billion in compliance costs and more than 114 million annual paperwork burden hours. That is time and money that could have been invested in expanding businesses and hiring new workers. If you thought that was bad, the Washington bureaucracy is on overdrive right now to create new regulations.

A report by the Committee on Oversight and Government Reform found that the Obama Administration issued 106 new rules in its first three years that collectively cost taxpayers more than $46 billion annually. That is four times the number of “major” regulations and five times the cost of rules issued in the prior administration’s first three years.

The same report found that, over the past decade, the number of “economically significant” rules (those which could cost $100 million or more annually) has increased by 137 percent.

While the sheer number is alarming, the impact they have on business is chilling.

A recent Gallup poll found that nearly half of all small businesses are not hiring because they are worried about new government regulations.

Who could blame them? This is the same government that literally likened spilt milk to an oil spill and expected dairy farmers to come up with an environmental mitigation plan on par with an oil company.

This week, the House worked to bring some common sense to the regulatory process by passing with bipartisan support the Red Tape Reduction and Small Business Job Creation Act (H.R. 4078). This legislation combines several proposals to provide relief from red tape and bureaucratic overreach.

Among them, it would freeze “economically significant” regulations until unemployment reaches 6 percent and would prevent “lame duck” administrations from issuing such regulations literally on their way out the door.

Our plan would give impacted parties a voice before federal agencies agree to binding legal settlements which require them to issue new regulations, ending the practice of “sue and settle” by which regulators exploit the legal system to achieve their agenda.

It also includes several provisions similar to those put forth by President Obama’s Jobs Council. These include making independent agencies like the National Labor Relations Board subject to the same regulatory review and transparency requirements as other agencies, streamlining the federal permitting process for construction projects, and requiring more thorough cost-benefit analyses from regulators.

While there is no silver bullet to reigniting the American economy, this proposal would go a long way toward encouraging economic growth by addressing what the National Federation of Independent Business identified as the single-most important problem for small business.

As President Reagan once said, “small business is the gateway to opportunity for those who want a piece of the American dream.” Let’s make sure the federal government is not blocking their way.

Kingston is a congressman serving the 1st District of Georgia, which includes Bryan County.

 

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