The hearing was titled, “Regulation Nation: The Obama Administration’s Regulatory Expansion vs. Jobs and Economic Recovery.”
Witnesses included John Taylor, a professor at Stanford University; C. Boyden Gray, of Boyden Gray and Associates; Lisa Heinzerling, a professor at Georgetown Law Center; and Robert Luddy, the president of CaptiveAire Inc. in Raleigh, N.C.
Gray expressed concerns on the impact of too much regulation on the economy:
“First, the Obama administration’s regulations impose immense costs on the economy. By their own estimate, their regulations have cost up to $32.1 billion – but that figure covers just 45 so- called ‘major rules’ issued in 2009, 2010 and 2011. Of course, we should view the administration’s self- serving estimates of regulatory costs and benefits with a skeptical eye.
“In sharp contrast to the administration’s own estimate, the American Action Forum estimates that this administration’s regulatory burden on the economy exceeds $450 billion. Second, regulators impose costs not just through the regulations that they directly impose, but also through the problem of regulatory uncertainty. While some assert that regulatory uncertainty is a ‘canard,’ a team of Stanford and Chicago economists recently demonstrated the impact of policy uncertainty, analyzing data that ‘foreshadows drops in private investment of 16 percent within 3 quarters, industrial production drops of 4 percent after 16 months, and aggregate employment reductions of 2.3 million within two years’ – findings that ‘reinforce concerns that policy-related uncertainty played a role in the slow growth and fitful recovery of recent years[.]’”
Taylor made the following comments regarding the U.S. House of Representatives’ recent regulatory bills that were designed to combat extensive business regulation:
“The House of Representatives recently passed a number of regulatory reform bills. Perhaps most significantly the House passed the Red Tape Reduction and Small Business Job Creation Act of 2012 (H.R. 4078), a comprehensive package of seven regulatory reform bills which … are designed to contain the recent regulatory expansion. A common feature of these bills is that they increase transparency, accountability, serious cost-benefit analysis, and use of sound science and reliable data. The same is true of regulatory bills passed by the House in the last session: the Regulatory Flexibility Improvements Act of 2011, the Regulatory Accountability Act of 2011, and the Regulations from the Executive in Need of Scrutiny Act of 2011. Good government bills like these are essential for controlling the regulatory process. Because the regulatory expansion along with other government policies is a likely cause of the poor economic growth and job performance, they should also be an essential part of an economic recovery program.”
Luddy also expressed the need for less regulation and government interference:
“The best way to empower entrepreneurs and encourage small business owners is to establish a moratorium on new regulation. Ultimately, it is my belief that the American Dream – a Dream that I have been fortunate to live – is predicated on the free enterprise system.”
Heinzerling shared opposing views, suggesting that business regulation was necessary:
“In explaining why we regulate and what regulation does for us, it is also important to describe the exact harms that will befall people if we do not regulate. That is, in addition to discussing the human role in creating these harms, we should also identify the harms themselves. These harms are many and varied.”
Visit ASA’s legislative website, www.TakingTheHill.com, to see witness testimony in its entirety.
