Depending on who is commenting, the Red Tape Reduction and Small Business Job Creation Act will be the savior of small business or the death of the American worker.
Originally called the Regulatory Freeze for Jobs Act of 2012, which was introduced by Congressman Tim Griffin (R-Ark.) in March, the act places a moratorium on new, "significant" regulations until the national unemployment rate stabilizes at or below 6 percent. The current unemployment rate is just over 8 percent; in January 2003, it was just under 6 percent.
“Hardworking Americans deserve a regulatory system that doesn’t hamstring their ability to invest, hire and grow,” said Griffin, upon its passage. “Yet Arkansas job creators have repeatedly told me how excessive and overly burdensome regulations have prevented them from hiring more employees and growing the economy. With America’s unemployment rate above 8 percent for 41 straight months and counting, even President Obama has admitted that 'unnecessary or too costly' regulations are 'placing unreasonable burdens on business [and having] a chilling effect on growth and jobs.' He's identified the problem, and by passing the Red Tape Reduction and Small Business Job Creation Act, the House has provided the solution."
According to Bill Kovacs, senior vice president for environment, technology and regulatory affairs at the U.S. Chamber of Commerce, “There are millions of jobs that are never created because of a dysfunctional permitting system that allows for endless challenges and appeals on all issues no matter how minor. This legislation would create a streamlined process to make many of these projects a reality.”
In addition to removing what the Chamber claims are “unnecessary and costly barriers obstructing critical projects by streamlining the permitting process,” H.R. 4078 incorporates the provisions contained in the “Sunshine for Regulatory Decrees and Settlements Act of 2012.” The chamber claims agencies do an end-run around the legal protections ensuring that the public has a say in the development of regulations.
“While settlements often can be an efficient use of court resources, the settlement process shouldn’t be regularly used as a way for agencies and environmental advocacy groups to engage in behind-the-scenes policymaking and the issuance of rules based on an agreement between a federal agency and a special interest organization,” Kovacs stated. “We commend House members for passing comprehensive reform that simplifies a regulatory system that has been growing at a very rapid rate for decades, and we urge the Senate to follow suit.”
Regulation Nation
More than 140 state and national organizations support H.R. 4078, including the U.S. Chamber of Commerce and the National Federation of Independent Business. In its first 3 years, proponents of H.R. 4078 claim the Obama administration created 120 new major regulations that cost Americans more than $46 billion every year; more than four times the number and five times the cost of major regulations created by the Bush administration in its first 3 years.
House Judiciary Committee Chairman Lamar Smith (R-Texas), an original co-sponsor of the bill, said, "The Obama administration has quickly turned the United States into a regulation nation. This administration has adopted an unprecedented amount of costly new regulations, which hinder small business growth and stall job creation."
According to a study by the Small Business Administration cited by Smith, regulations cost the American economy $1.75 trillion annually. “We need to encourage small businesses to expand, not tie them up with red tape,” Smith added.
Proponents claim the legislation helps lift the burden on small businesses and frees them up to spend more, invest more and produce more in order to create more jobs for American workers. They also claim H.R. 4078 is “narrowly tailored only to stop unnecessary regulations.”
“As the economy continues to sputter, it is important to ensure that the nation’s biggest job creators are not strapped with punishing new rules,” said Susan Eckerly, senior vice president for federal public policy at the National Federation of Independent Business. “Research by the NFIB, as well as the federal government, shows the cost of complying with federal rules is a huge burden and a top concern for small businesses. These job creators desperately need the help of Congress to cut red tape.”
Harmful to Millions
Opponents of the bill claims it threatens clean air, safe food, a secure financial system, workplace safety and more, and will harm millions. If the measure becomes law, Public Citizen claims, “average Americans would suffer while polluters, reckless Wall Street investors and unethical corporations would gain.”
Should H.R. 4078 become law, it would block a smorgasbord of regulations designed to ensure power plants comply with the Clean Air Act, protect workers from beryllium exposure, make the food supply safer, ensure Iraq and Afghanistan war veterans receive compensation owed to them for extended deployments, track medical devices so patients can be made aware of recalls, establish the rules for bird-hunting season, protect people from another Wall Street meltdown and more.
More than 30,500 activists signed Public Citizen’s petition urging Congress not to pass H.R. 4078. On July 23, U.S. Reps. Henry Waxman (D-Calif.), Elijah Cummings (D-Md.) and Ed Markey (D-Mass.) joined Public Citizen and the Coalition for Sensible Safeguards in denouncing H.R. 4078.
"HR 4078 is a gift to the corporate criminal and wrongdoer lobby, pure and simple,” said Robert Weissman, president of Public Citizen, one of the leaders of the Coalition for Sensible Safeguards. "We need tighter controls over the big banks that are fixing markets, ripping us off and resuming risky practices that threaten economic stability. We need stronger rules to prevent the epidemic of needless death and injury from workplace hazards. We need far-reaching rules to avert catastrophic climate change. We need rules to ensure the safety of our food supply. And we need the government to perform its everyday functions."
Assistant Secretary of Labor Dr. David Michaels has stated repeatedly that OSHA and OSHA regulations do not kill jobs. If anything, he insists, regulations protect workers and jobs.
In February 2011, Michaels stated: "The failure to issue sensible regulations endangers not only workers' health and safety but also hurts American competitiveness. For example, because OSHA has a weak noise standard and weak enforcement, U.S. employers have no incentive to buy modern, quieter machines, which means that U.S. manufacturers don't build them, and there are few jobs in the United States for engineers who could design them. A recent study by the National Academy of Engineering concludes that European manufacturers are way ahead of us in designing and building modern, quieter machinery. Today, when businesses anywhere in the world want to buy quieter equipment, they look not to the United States but to Europe."
Congressman Cummins agrees with Michaels, saying, "The problem is that the Republican approach is based on a faulty premise, that regulations kill jobs. This myth has been widely discredited by economists on both sides of the aisle. The time has come for Congress to work together to focus on creating jobs and protecting the health and safety of American families. We do not have to choose one or the other."
The legislation now goes to the U.S. Senate for consideration and a possible vote.