White House Actions on Regulatory Reform Do Not Match Its Rhetoric

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The Obama Administration has only insignificantly lightened regulatory burdens.

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President Obama says he wants his administration to reduce regulatory burdens. On several occasions since January, he and his Administrator of the White House Office of Information and Regulatory Affairs (OIRA), Cass Sunstein, have written Wall Street Journal op-eds trumpeting the administration’s regulatory reform efforts. Earlier this month, President Obama even risked alienating his base by delaying new ground-level ozone standards by the Environmental Protection Agency (EPA) as part of an effort to reduce “regulatory burdens and regulatory uncertainty.”

However, Americans should withhold their praise until the administration’s remaining flood of significant regulations recedes. At the same time as the administration wants to take credit for reducing some regulations, it has continued to add significantly to the economy’s regulatory burden.

Prior to the delay in the EPA’s ozone standards, the most notable deregulatory “achievement” under the President’s executive order on regulatory review was the removal of spilled milk from the EPA’s strict “spill prevention, control, and countermeasure” regulations. This decision prevented roughly $146 million annual in new costs. Yet, according to former OIRA Administrator Susan Dudley, this regulation had not been in place for much time before it was dropped, so the expected savings “aren’t [in] costs that milk producers ever incurred.”

EPA also touts the $88 million in annual cost savings that will result from phasing out requirements to use Stage II Vapor Recovery Systems, which collect gasoline vapors to minimize their release into the atmosphere. This barely counts as window dressing compared to the new regulatory burdens the EPA still proposes. In August, President Obama reported that EPA has proposed three other rules that together will add as much as $14.5 billion in annual costs to the economy.

Sunstein has highlighted the plan of the Internal Revenue Service (IRS) to reduce an annual 55 million hours in paperwork burdens. While this is a strong start, taking numbers like these out of context can be misleading. According to the National Taxpayers Union, IRS tax forms and other Treasury Department paperwork already impose more than 7.6 billion annual hours of burdens. The IRS’s proposed paperwork reforms amount to a reduction of seven-tenths of one percent – hardly a relief come April 15th.

Meanwhile, The Dodd-Frank Act, which creates one of the largest regulatory overhauls in history and is being implemented by more than a dozen agencies, will add more than 20 million annual paperwork hours.

Admittedly, some of the nation’s heavy regulatory burdens stem from congressional mandates already on the books. But new laws like Dodd-Frank along with the President Obama’s health care reform law call for a slew of new regulations to be written. The administration has also proposed three Department of Transportation rules with estimated annual costs of about $1.5 billion each.

The administration’s trumpeted regulatory turnaround will definitely need to be “historic” (as Sunstein claims) if the nation is to get out from under its current governmental vice grip. Only real action to reduce regulatory burdens will help create jobs and generate economic growth. So far, however, the Obama Administration’s actions have not matched its rhetoric.

Sam Batkins

Sam Batkins is the Director of Regulatory Policy at the American Action Forum.