Red Tape Reduction and Small Business Job Creation Act

Floor Speech

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Mr. ISSA. Madam Chair, I yield myself 2 minutes.

Job creation is, rightfully, at the top of Americans' agenda. Americans know that as long as the unemployment rate stays high, wages are stagnant and more than 12.7 million Americans seek jobs they cannot find. More than 42 percent, or nearly 6 million, of those Americans have been unemployed for more than 6 months.

Madam Chair, the verdict is in: the President's stimulus plan has failed. While costing over $1 trillion and still counting, those jobs that were created were short, and they too are disappearing. Ultimately, small business will create the engine going forward.

Today's bill, in fact, is designed specifically to give confidence to America's business creators, ones that we have heard from on the committee for more than 18 months, the opportunity to take a breath, evaluate what is the lay of the land, and go forward with the business plan, no longer worrying that out of the blue will come major regulatory changes, ones that were unforeseen just a little while ago, that ultimately change their plans, change their ability to make a profit.

Whether it's the President's ACA or ObamaCare or smaller $100 million, $200 million, $1 billion new regulations, this uncertainty has put dollars on the sidelines. Today, through more than seven different elements of the titles of the bill, our effort will be to ensure that we do not propose without serious consideration new regulations.

The President himself, while producing more than 106 major rules costing more than $46 billion, has said, We may be overregulated. His own chief spokesperson, Mr. Sunstein, has said that, in fact, regulations can cost jobs.

So, Madam Chairwoman, it is extremely important that we understand that we must have regulatory certainty, something we will only have by the passage of today's bill.

I reserve the balance of my time.

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Mr. ISSA. Madam Chair, I trust the gentleman from Virginia is well aware that the typographical error in the bill under consideration was, in fact, a mistake done by professional staff. And although unanimous consents are not permitted in the Committee of the Whole, I would ask the gentleman from Virginia if he would be willing--or let me rephrase that--if he would not object to a unanimous consent in the House to make a correction in what was clearly a typographical error made by nonpartisan professional staff at the Leg Counsel's office.

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Mr. ISSA. Reclaiming my time, nothing could be more insincere than to pick on professional staff on a typographical error.

If we have to go to the Rules Committee, I guess we will. But I am really sorry to see that kind of an attitude on what the gentleman and all of us know was simply a typographical error.

With that, I yield 5 minutes to the gentleman from Wisconsin (Mr. Ribble).

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Mr. ISSA. I trust the gentleman from Missouri is aware that last year, out of over 3,000 regulations coming out of the administration, no more than 66 would have even qualified for this moratorium.

With that, I yield 3 minutes to the gentleman from Texas (Mr. Conaway).

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Mr. ISSA. There you go again. We're shutting down the entire regulatory system because 66 out of 3,000 regulations would be affected by this bill before us today. In just last year, 66 out of 3,000, that's shutting it down.

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Mr. ISSA. Madam Chair, pursuant to the unanimous consent made in the House, I will insert the staff report from the Committee on Oversight and Government Reform entitled, ``Continued Oversight of Regulatory Impediment to Job Creation,'' the result of over 30 separate field hearings and hearings by the committee, and the work of countless hundreds of job creators around the country who have participated.

HOUSE OF REPRESENTATIVES

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Darrell Issa (CA-49), Chairman

STAFF REPORT

July 19, 2012

Continuing Oversight of Regulatory Impediments to Job Creation: Job Creators Still Buried by Red Tape

SUMMARY

Rules and red tape imposed by the federal government choke economic expansion and job growth, according to job creators themselves. Despite hearing this message loud and clear, regulations implemented during the Obama Administration have moved aggressively in the opposite direction--the regulatory state continues to grow, adding billions of dollars in compliance costs to businesses and job creators. These costs will ultimately be paid by consumers.

Although Obama Administration officials frequently proclaim it has issued fewer regulations than its predecessors, analysis by the Committee on Oversight and Government Reform reaches a far different conclusion: the Obama Administration has issued far more of the most expensive group of regulations with a higher overall economic cost.

The aggressive march of the regulatory state has been the subject of an ongoing, multiyear examination by the Committee. This staff report expands on earlier Committee work and documents how the regulatory state is proliferating with dire consequences for the economy, and how federal regulations continue to impede job growth and business expansion.

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 that will be finalized increased 18.8 percent. The published regulatory burden for 2012 could exceed $105 billion, according to the American Action Forum, headed by a former director of the Congressional Budget Office. Since January 1, the federal government has imposed $56.6 billion in compliance costs and more than 114 million annual paperwork burden hours.

Beyond this ``routine'' rulemaking, the number of rules with significant costs is on the rise. Analysis from the Heritage Foundation indicates that the 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.

Workers and job creators confirm that the oppressive regulatory red tape environment continues to hinder improvement. A recent Gallup poll found that nearly half of small businesses are not hiring because they are worried about new government regulations. Forty-four percent of likely voters say they believe regulations from the Environmental Protection Agency (EPA) hurt the economy.

Research conducted by The Winston Group found that 53 percent of voters say federal regulations are one of the major reasons the economy is struggling; 59 percent think that cutting regulations is vital to improving the economy, and 52 percent indicate that stopping new regulations would free employers to begin hiring. According to the National Federation of Independent Business, the issue of regulation and red tape is one of the single most important problems for small businesses.

These views are held not just by poll respondents or business group members--senior Obama Administration officials have spoken out on the need to actively address regulatory impacts on job creation and economic growth.

The White House has praised the Committee for pointing out deficiencies in its approach to regulations. Office of Information and Regulatory Affairs (OIRA) Administrator Cass Sunstein said ``I'm especially grateful to you Mr. Chairman and to the committee as a whole for its constructive and important work on this issue over the past months. It's very significant to try to get regulation in a place where it's helpful to the economic recovery.''

The OIRA Administrator has also said that expensive regulations can ``increase prices, reduce wages, and increase unemployment (and hence poverty).''

OIRA's 2012 Draft Report to Congress on Federal Regulations concedes that ``regulations ..... can place undue burdens on companies, consumers, and workers, and may cause growth and overall productivity to slow.'' It also notes that ``evidence suggests that domestic environmental regulation has led some U.S. based multinationals to invest in other nations (especially in the domain of manufacturing), and in that sense, such regulation may have an adverse effect on domestic growth.''

Finally, OIRA agrees that ``regulations can also impose significant costs on businesses, potentially damaging economic competition and capital investment,'' if not carefully designed.

This staff report examines three types of regulations (energy and environmental, labor, and financial services), and looks at both current and new/proposed rules, their costs and impacts on job creators. It concludes that until the government addresses the overwhelming cost, scope and impact of the ever-expanding regulatory state, it is not in a position to aid job creators and spur economic recovery. Moreover, the staff report suggests that until these regulations are addressed, high unemployment and slow economic growth will persist.

KEY FINDINGS

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 published 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 indicates that the 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--has increased by more than 137 percent.

Over 40 EPA regulations cited by job creators as barriers to growth and expansion in the Committee's February 2011 staff report remain a problem.

The Boiler Maximum Achievable Control Technology (MACT) rule proposed in 2010 will cost job creators up to $15 billion in regulatory compliance costs. A similar ``Utility'' MACT rule would cost providers $9.6 billion annually and result in the shutdown of 25 percent of U.S. power generating units.

EPA's proposal to regulate coal combustion residuals (``coal ash'') usurps states' previous role and exerts unprecedented federal control over the utility industry. More than half of the complaints received from business and industry groups expressed concern last year, while half of the complaints are new. Compliance costs range from $78-110 billion over the next 20 years while job loss estimates range from 39,000, under a low estimate, to 316,000, under a high estimate.

EPA's E15 ethanol rule ``places consumers and vehicle manufacturers at significant risk'' but is proceeding despite these concerns. EPA estimates industry compliance at $3.64 million per year but also notes that half of existing retail outlets are incompatible with the fuel, and would need to purchase and install new equipment.

Proposed fuel economy standards will increase the cost of new vehicles by at least $4,000 per vehicle while delivering less than half that amount in fuel savings and could result in the loss of as many as 220,000 automotive jobs.

Tier 3 gasoline standards proposed by EPA would impose a total economic cost of approximately $8 billion on the industry and raise the cost of gasoline by six to nine cents per gallon for consumers.

Rules attributed to the Dodd-Frank Act will grow from 36 implemented today to roughly 400 required under the act. Rules governing ``conflict minerals'' such as gold, tin, tantalum and tungsten will cost the industry $71 million per year and impact as many as 5,000 companies. The National Association of Manufacturers estimates true compliance costs for the rule to be $9-16 billion.

A U.S. Chamber of Commerce/Business Roundtable survey notes that those impacted by a proposed ``end user'' rule effecting derivatives would have to sideline up to $6.7 billion in working capital and cost 100,000 jobs.

The National Labor Relations Board's ``notice posting rule'' promoting unionization in the workplace will cost employers an estimated $386.4 million and in the words of one industry organization, ``could set a disturbing precedent and chill job creation.''

The Committee is publishing this staff report to tell the American people directly what job creators say is the true cost and impact of the Obama Administration's regulatory agenda.

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Mr. ISSA. I yield myself such time as I may consume.

I never thought I would hear former Chairman Waxman speak in terms of how dysfunctional Congress is, how we just don't operate and can't be trusted; but, clearly, I heard him say that today.

I still believe in the institution that all of us belong to. In living up to our responsibility, Congress has the responsibility to pass laws; and it has an absolute obligation to oversee the administration of those laws. The executive branch, or administrative branch, actually, only has the right to create regulations and executive orders to support the laws that have been created.

For too long, we have abrogated our responsibility. Former Chairman Waxman apparently would like to continue doing that, in what he said of our low rating and essentially repeating it.

Until the unemployment rate reaches 6 percent, taking back just less than 66 out of 3,000 regulations last year and making them accountable either to fall into emergency requirements into specific categories of essential harm or to come to Congress would seem to be a small task.

I have no doubt that if the shoe were on the other foot and President Bush was still in office and the Democrats were still in charge, that this bill would look more favorable to them. But that's not what we should be here deciding, who it favors or disfavors. When this bill becomes law, it will, in fact, become law for the future for Democrats and Republican Members alike.

The elimination of the ``midnight regulations'' that for so long have been abused by Presidents of both parties, H.R. 4607 absolutely is long overdue. President George W. Bush rushed excess amounts to close before he left. President Obama will, undoubtedly, do the same. That's wrong. It's simply wrong. And we know is. And we know that often, as this bill says, these are regulations that aren't heard before the election and are concluded in those 75 days before departure.

It's wrong. We know we need to stop it. We shouldn't abrogate our responsibility. And the Members on the other side will suddenly decide, I'm sure, this is a better idea, should Mitt Romney be elected in the fall.

This bill is supported by the Chamber of Commerce, Associated Builders & Contractors, the Small Business & Entrepreneurship Council, and the National Federation of Independent Businesses.

The fact is, this is about simply saying not that we're going to stop 3,000 regulations, but that we're going to slow and evaluate more carefully the 66 largest of them by this administration last year.

During debate, the administration was essentially lauded for having passed fewer regulations in numbers than President George W. Bush. I checked that during debate. That's true. But that's because President George W. Bush did regulatory changes to eliminate regulations, and those scored. When you actually look at the cost of regulations under this administration, the cost is dramatically higher.

I will share with my colleagues on the other side of the aisle that cost is not just dollars and cents, that you have to look at all the benefits. But for too long, we've had ``sue and settle.'' We've had the ability for these determinations to be made without that due process of looking at both sides.

So today, as we move this bill, I clearly appreciate the fact that the men and women of my committee--the staff, the hardworking people who never get seen in front of the camera, who, in fact, have worked through 30 hearings, through countless interviews with job creators--have made sure that the right things are in this bill for the right reason.

I urge passage, and I yield back the balance of my time.

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