Client & Partner Alerts

Curtailing Regulations Gets Big Applause at State of the Union Address

During President Obama’s State of the Union Address last week, the biggest applause erupted when he announced plans during his final year to do away with a number of regulations seeming to bog down the economy. He didn’t even announce what they would be, but Democrats, Republicans and Independents alike instantly voiced their loudest approval of the evening.

The approval could prove problematic, however, as the multiple constituencies have their own agendas for doing away with regulations that they do not like. Even though the applause was enthusiastic, it was far from unanimous support for the President’s approach.

This month’s Alert will examine the stresses and strains of changes to regulations during the upcoming year.

Protests continue over regulations

Recently in the Eastern Oregon a small group protesters occupied federal land, which has now resulted in one fatality and no end in sight for the remainder of the protesters. While the President’s announcement during the State of the Union message might garner applause from this group of protesters, it is doubtful that this is what the President had in mind as far as reducing regulations.

In fact, it is doubtful the details of the reduction of possible regulations could be agreeable to many of those who were applauding wildly.

Other Examples

The President and many in his party talk about issues such as climate change, income equality, increases in the minimum wage, reduction in tax breaks for the wealthiest individuals, closure of tax loopholes benefitting corporations, aid for students, increased medical care, expanding tax cuts for low income workers, aid for small businesses, and other social programs.

The Republicans, meanwhile, focus on issues like simplifying the tax code, ways to benefit business, ways to extricate or defer federal regulation to State and local jurisdiction. It is wishful thinking to believe that any of this will lead to the curtailment of regulations and legislation.

Reasons to believe regulations will be increased and not decreased

Climate change has recently been the subject to international agreement. While far from a sure thing, it is far more likely to result in additional regulations rather than less. Here are other matters that may result in additional regulations in 2016:

• Middle East conflict
• Immigration
• Minimum wage
• Tax reform
• Energy Policy
• Preservation of wild lands and wildlife
• Introduction of new drugs for diseases
• Emission Regulation (i.e. The VW issue)
• Wall street issues—subprime mortgages
• Mergers and acquisitions
• Import-export and Trade Regulation
• Healthcare
• Building standards and land use—planning
• Auto safety standards
• Insurance regulation
• Gambling
• Professions, licenses and certifications
• Business licenses
• Mandatory fruits and vegetables inspections
• Occupancy certificates
• Restaurant inspections
• Unsafe substances such as lead considered (Flint, Michigan)

No regulation or reduced regulation presumes all people will do the right thing or that there is no universal right thing. (people would be free to do what they choose). The above listed subjects seem unlikely seem unlikely to receive that kind of consensus.

HOUSE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
STAFF REPORT OF JULY 19, 2012

Based on data showing that there was just too much red tape standing in the way of job creation, the House passed the “Red Tape Reduction and Small Business Job Creation Act.
The underlying report was focused on three types of regulations–energy and environmental, labor, and financial services.

Its key findings included:
• From 2010 to 2011, the number of final rules issued by federal agencies rose from 3,573 to 3,807—a 6.5 percent increase. During that same time frame, the number of proposed rules increased 18.8 percent.
• The regulatory burden for 2012 could exceed $105 billion, according to the American Action Forum, headed by a former director of the Congressional Budget Office.
• Analysis from the Heritage Foundation indicated that that Obama Administration issued 106 new rules in its first three years that collectively cost taxpayers more than $46 billion annually—four times the number of “major” regulations and five times the cost of rules issued in the prior administration’s first three years.
• In the past decade, the number of economically significant rules in the pipeline—those that could cost $100 million or more annually—had increased by more than 137 percent.
• Numerous energy and EPA regulations remained a problem.

Nothing came from the bill, by the way.

Conclusions

Over-regulation has been a pet peeve of most of us forever. Even new rules adopted by our homeowners association or new restrictions on where we can park our cars can be frustrating. If President Obama was referring during his speech to curtailing regulations that each of us found particularly bothersome or frustrating, we probably would have joined in the applause.

We often praise what we would like to hear, rather what was actually said. With no specifics given by the President, people applauded perhaps for very different reasons.

blog footer1