The Coming Regulatory Black Hole

Forget the fiscal cliff. Sooner or later — probably later — Speaker Boehner and the president are going to come to an agreement that will raise taxes on the wealthy with a solemn, cross-our-hearts-and-hope-to-die promise from the Democrats to cut an unspecified amount from the budget at an unspecified later date.


Just when the Democrats are going to screw over the GOP and refuse to make any significant budget cuts or engage in negotiations that would reform entitlements will also be unspecified.

But there is another looming crisis for the taxpayer and businesses large and small. It is the flood of new regulations that will be issued in the coming months. Delayed by the White House before the election because their implementation would have adversely affected business and cost jobs, thousands of new rules will be issued that will cost American business an estimated $100 billion. This is on top of the already gargantuan regulatory burden that the Competitive Enterprise Institute estimates at $1.8 trillion — $215 billion this year alone.

Just how many new regulations will business have to deal with? We don’t know because the administration has failed to issue a report, required by law, that would set out Obama’s regulatory agenda. The Heritage Foundation’s Diane Katz explains:

Congress mandated a regulatory agenda from each agency in 1980 under the Regulatory Flexibility Act. The statute calls for release every April and October of a description of all rules likely to have a “significant economic impact” on a substantial number of small entities. A series of subsequent executive orders extended agenda requirements to all regulations under development or review by some 60 departments, agencies, and commissions.


Of course, the Obama administration is no stranger to flouting the law when it comes to deadlines. Senator Coburn pointed out that the administration has failed to meet dozens of deadlines when it comes to Obamacare alone. It also missed a budget deadline last summer, failing to send Congress a mid-session review. Most recently, the president was late with his report to Congress on the impact on departments and agencies of going over the fiscal cliff.

What is it with these people? They’re like college kids putting a major paper off until the last minute and then pulling an all-nighter to write it. But in the case of the regulatory agenda that is required by law to be submitted to Congress twice a year, the Obama administration fell asleep in the middle of the night and woke up a year later. Their last regulatory agenda report was in the fall of 2011.

The dog must have eaten the Spring 2012 report, and the Fall 2012 agenda must have been lost in the campus mail.

Senator Rob Portman was forced to send a scolding letter to the president, reminding him he’s not following the law:

“For nearly three decades, presidents of both parties have published their plans for new regulations twice a year,” Portman wrote to Obama today. “Now, with the spring plans still missing, the Fall 2012 Regulatory Agenda is also overdue. In light of this apparent trend, I am writing to inquire whether your Administration has chosen to abandon this tradition of transparency altogether.”


Now that the election is over, it is obvious why the administration has refused to update Congress on its regulatory plans. There are as many as 4100 rules in the pipeline ranging from the annoying to the tortuous. And the White House bottled them up for “review” until the president was safely re-elected because many of them are so onerous that they would have cost jobs.

One example is the inexplicable new regulations, courtesy of Obamacare, governing vending machines and restaurants, ordering them to display nutritional information. These regulations were expanded to include grocery stores and virtually all food service chains. The estimated cost: $1.1 billion with 1.4 million additional paperwork burden hours. These regulations have been “under review” for months but were delayed by the White House.

Another example comes from the American Action Forum:

[A] proposed rule requiring “Sound for Hybrid and Electric Vehicles” has a statutory deadline of July 5, 2012, but the regulation remains at the White House. There is no indication how much ‘artificial vehicle sound’ devices will cost automobile manufacturers. The public won’t know until the administration publishes the proposal.

Typically, a new regulation remains at the White House under review for 90 days. Some of the regs that will be published in the next couple of months have been tied up by the administration for a year or more. The reason is obvious, as the National Association of Manufacturers showed in a report on new EPA regulations in the pipeline:


The report, issued in late November, said compliance costs for six major EPA regulations — including rules limiting air and water pollution from coal- and oil-fired power plants — could total up to $111 billion by government estimates and up to $138 billion by industry estimates. Construction costs could total $500 billion, it said.

Jay Timmons, president and CEO of the manufacturing group, warned of a “devastating ripple effect” that could be felt throughout the U.S. economy if federal rules are not relaxed or delayed. Some manufacturers are likely to “close their doors for good” because of EPA rules, Timmons said.

One would imagine a lot of those lost jobs would have been in Ohio — something the Obama campaign just couldn’t countenance. Better to have those Ohio voters lose their jobs once the president was safe and sound back in the White House than lose them before the election and blame Obama for their suffering.

You have no doubt heard the term “unfettered capitalism” bandied about by the left over the last several years. This refers to the left’s idea that American businessmen are a bunch of robber barons who practice a kind of predatory capitalism not seen since the gilded age. Unrestrained by government, businesses cheat consumers, steal from grandma, rape the land, poison our water, pollute our air, deny opportunities to minorities because they’re racist pigs, and gleefully place workers in danger of their lives to make an extra buck.


It’s a cute bedtime story, but anyone who uses the term “unfettered capitalism” to describe how American business operates in the 21st century is an ignoramus. The Federal Register, published every week day and containing all proposed rules and regulations — most of which govern business activities — was 81,000 pages in 2011 alone. Many of those rules were never adopted, but the scope of business activity regulated by as many as 60 federal agencies and departments is breathtaking. According to the Heritage Foundation, as of 2008 there were 145,000 pages of regulations — the overwhelming majority of which affect American business.

Add to that state and local rules and one wonders how anyone could be so stupid as to charge that the problem with America is “unfettered capitalism.”

Surely there are many of those regulations that are needed and necessary. Businesses are run by human beings, and there are some shady characters who think nothing of dumping toxic waste, forcing employees to work in unsafe conditions, or of surreptitiously polluting air and water. Some regulations are burdensome but, as the Heritage article points out, many regulations actually increase competitiveness, protect property rights, and keep us safe from terrorists.

But few of these regulations that the Obama administration has sat on for months, waiting for the campaign to end, meet the “necessary” criteria. In fact, the reason that President Obama restrained his eager-beaver agencies was because of their detrimental effect on the economy.


This is not a regulatory cliff we’re approaching. It is a regulatory black hole where jobs and profit are sucked over the event horizon and there is no hope of escape.


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