Overregulation of the American Economy

Floor Speech

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Mr. SULLIVAN. Mr. President, I rise in support of an amendment that I am hoping will be part of the Energy bill currently being debated on the floor and being shepherded through the Senate by my colleague from the great State of Alaska, Senator Murkowski.

I commend Senator Murkowski, the chair of the Energy and Natural Resources Committee, for the bill she has worked on for months-- incredible hard work. It is great to have her as the chair of the committee, certainly for Alaska but for the entire country. States such as the Presiding Officer's recognize how important American energy is for all our citizens.

One of the many positive aspects of the bill we have been debating is that it is focused on cleaning up old regulations, cleaning up outdated programs, getting rid of some of the things we don't need.

The amendment that this Senator would like to offer as part of the Energy bill is based on a bill I recently introduced called the RED Tape Act of 2015. The R-E-D in RED Tape Act stands for Regulations Endanger Democracy Act, and this Senator believes that is the case. The onslaught of regulations are not only threatening our economy but are actually threatening our form of government. That is why I am proposing a simple one-in, one-out bill that will cap Federal regulations--a simple commonsense approach to Federal regulations that will begin to address what I think the vast majority of Americans recognize as a monumental problem. What is that problem?

Economists around the country and many Members of this body believe that the overregulation of the American economy is why we can't grow this economy. This Senator thinks it is often looked at as a partisan issue. It is not a partisan issue. To the contrary, it is a consensus issue about the impact of regulations on the American economy.

To give a couple of examples, here is how The Economist put it in a 2012 cover story titled ``Over-Regulated America.'' The redtape is right here. This lead article in The Economist said a couple of years ago that ``America needs a smarter approach to regulations'' that will ``mitigate a real danger: that regulations may crush the life out of America's economy.''

There is a real danger that regulations will crush the life out of the American economy. I think that is already happening. Again, this is not a partisan issue. Many Democrats in this body have called for a smarter approach to Federal regulations.

Governors, particularly Democratic Governors across the country, have also decried the overregulation of our economy. For example, the two- term Massachusetts Governor, Deval Patrick, made regulatory reform a hallmark of his administration's approach to growing their economy, and it is not just Democratic Governors. It is actually Democratic Presidents. In 2011, Newsweek featured a cover story with President Clinton's face on the cover that highlighted his 14 ideas to grow the economy and create jobs. In the article, President Clinton lamented the long wait time for permanent approvals for infrastructure projects throughout the country due to overregulation.

One of President Clinton's top recommendations to put hardworking Americans back to work was to speed up the regulatory approval process and grant States waivers on burdensome Federal environmental rules to hasten the time that construction projects can begin and real hardworking Americans can work.

Even President Obama in his recent State of the Union Address focused on regulations. The President of the United States said:

I think there are outdated regulations that need to be changed. There is red tape that needs to be cut.

President Obama stated this just a few weeks ago. As a matter of fact, it was the biggest applause line of the entire evening. Democrats and Republicans roared at this. The President recognized what redtape is doing to this great economy.

So I took the liberty to write the President after his State of the Union Address, commending him for his focus on regulations, and asked him to get his administration to back my RED Tape Act and to follow through on his promise to reach across the aisle for good ideas to grow the economy. This is one that would strengthen our economy, create jobs for hard-working middle-class Americans, union workers, and pave the path for what we haven't seen in over a decade, a private sector that is thriving. That is the heart of the American dream.

Before I get into details, let me spend a few minutes on the economy and why I believe we must pass this amendment. Our debt is approaching $20 trillion. The national debt of the United States has increased more under President Obama's two terms than it has under all previous administrations in U.S. history. Of course, one of the reasons is we are spending too much, but this Senator believes the biggest reason is that we cannot grow this economy.

The U.S. average economic growth rate for almost our entire history as a country, from 1790 to 2014, has averaged about 3.7 percent GDP growth. That is real American growth. For over 200 years there has been ups and downs, but the average has been about 4 percent GDP growth. This is what has made us great as a nation. The Obama administration's average GDP growth is about 1.5 percent--dramatically less than the traditional levels of American growth that we need. As a matter of fact, officially this recovery has been the weakest in over 70 years.

While the American people might not have all these specific numbers at hand, they know something is wrong. They know they are not finding the good jobs, that they are not getting the raises in the jobs they have. They know their family's budget isn't stretching as far as it used to stretch. This should not be the case.

We live in the greatest Nation in the world. We have so many advantages over other countries. Our high-tech sector is still the most innovative in the world, an efficient agriculture sector feeds the world, and our universities are the best universities in the world by far. We are in a renaissance in energy production with renewables, oil, and gas that have once again made us a superpower in the world, one of the best managed, highly productive fisheries in the world from my State in Alaska, and we certainly have the most professional, lethal military in the world. We have so many advantages over every other country in the world. So why aren't we growing our economy? Why can't our economy expand at traditional levels of American growth?

Look at this chart behind me. This clearly to me and to many others is one of the reasons: new regulation on top of old regulation on top of old regulation--a steady increase year after year, starting here in 1976 with no end in sight, an explosion that is going to keep going until we do something about it. Through these regulations the Federal Government is looking to regulate every aspect of the American economy, and that is one of the main reasons why we can't grow.

When it was first published in 1936, the Federal Register, which contained a daily digest of proposed regulations from agencies and final rules and notices, was about 2,500 pages. By the end of 2014, the Federal Register had ballooned to close to 78,000 pages. What we are seeing is an explosion of regulations.

This chart relates directly to why I believe we can't grow our economy. Remember regulations are taxes. They cost American families, American consumers, and American small businesses. There are huge costs to this explosion, particularly when they accumulate like this.

President Obama's Small Business Administration puts the number of the annual cost of regulation that impacts the U.S. economy at about $1.8 trillion per year. That is a number that would make it one of the largest economies in the world. That is about $15,000 per American household, about 29 percent of the average American family budget. That is what we are doing to our families and our economy.

I believe a huge part of the problem of what is keeping our economy back and the opportunities for middle-class families is right here in this town. The Federal Government, with agencies and the alphabet soup of agencies--the IRS, the BLM, the EPA--are constantly promulgating new regulations. What they don't do is they never remove old regulations. From across the country, whether it is Alaska or Maine, our businesses, our citizens, and particularly the most vulnerable, our families, are being impacted by the explosion of regulations from the Federal Government right here in Washington, DC.

Let me give you a few examples. On the North Slope of Alaska they can't get small portable incinerators that comply with the upcoming EPA regulations, so the trash in these amazing communities in my State piles up until it is actually taken out by airplane. This is polar bear country. This is dangerous--trash everywhere. It is certainly harmful to the environment because regulations don't allow incinerators.

Because of the Federal roadless rule in Southeast Alaska, we can't even build new alternative energy plants for the citizens of my State who desperately need energy because we pay some of the highest costs of any State in the country with regard to energy. Nationally, bridges are crumbling, and we cannot get them built, in large part because of the overburdensome Federal regulations.

On average, it takes over 5 years to permit a bridge in the United States--not to build a bridge, just to get the Federal Government's permission to build a bridge. Right now there are 61,000 bridges in our country in need of repair, but burdensome regulations delay commonsense repairs. These bridges are being crossed by our trucks, carrying the Nation's commerce, our children, schoolbuses, and parents trying to get home for dinner. Thousands of communities across the country are simply keeping their fingers crossed, hoping their current bridges last another year.

Let me provide one more example in terms of what is happening with regard to the overregulation of our economy. This involves one of the most important sectors of the U.S. economy--small community banks. Over 1,300 small community banks have disappeared since 2010, and only 2 new banks in the United States have been chartered in the last 5 years. If you ask any small community banker what is driving this, they will point to this chart. Regulations from Washington, DC, are driving our small community banks out of existence. Even during the Great Depression, we had on average 19 new banks a year. In the last 5 years, the United States has seen two new banks chartered in our country.

So what do we do? Well, the good news is that many colleagues in the Senate on both sides of the aisle have offered suggestions and introduced bills to stop the redtape, to stop this trajectory of Federal regulations from strangling our economy and our future. But we need something that is simple, something that hard-working Americans understand, and something that is bold to take on this challenge. I believe the amendment I have offered to the Energy bill, the RED Tape Act, is both simple and bold enough to take on this challenge. It is only 5 pages long. Using a simple one-in, one-out method, it caps Federal regulations. New regulations that cause a financial or administrative burden on the economy, on hard-working American, on middle-class families, on union workers would need to be offset by repealing an existing regulation. Simple--you issue a new regulation, you repeal an old regulation. People understand that and it makes sense.

This is not a radical idea. This is not some kind of poison pill that we want to attach to the Energy bill, because I think that is a good bill. It is an idea that is gaining consensus not only throughout the country but throughout the world. Other countries have actually taken up this idea to fix their regulatory problems as well. In Canada, they recently put an administrative fix to their regulations that was one- in, one-out. In Great Britain they have done this to the point where it is viewed as so successful that they are not talking about one-in, one- out anymore, they are talking about maybe one-in, two-out. So I think this is an idea that both parties of the Senate, Members from both sides of the aisle, can get behind.

Even National Public Radio did a recent story about how well this one-in, one-out rule is working in Canada. It has freed up hundreds of thousands of hours of paperwork for small businesses in particular. Even the Canadian Socialists have backed this idea. I certainly hope Senator Sanders is listening, and I hope I can get him and other Members of this body to support this amendment.

To be clear, I am certainly not against all regulations or permitting requirements. When I served as the commissioner of the Department of Natural Resources in Alaska, we worked with our bipartisan legislature to overhaul our permitting and regulatory system and to bring what we have seen on the Federal Government side--a huge backlog of permits--to get projects moving. We brought that backlog down by over 50 percent through regulatory and permitting reform, and we did so with the absolute understanding that protecting our environment and keeping our citizens safe was a fundamental precondition to any of our actions. But we can do both. We can bring down this huge burden and still make sure we have a clean environment and a strong, healthy economy.

There are simply too many Federal regulations out there, and the American people know it. It is time this body stops increasing this number of regulations and puts a cap on it.

Finally, if we do this, we will make sure that all of the comparative advantages we have in this country--so many that we have over so many other countries--will enable us to unleash the might of the U.S. economy, create better jobs, and create a brighter future for our children and their children.

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