Regulatory Spoofery

Barack Obama, in a Jan. 18 op-ed article for The Wall Street Journal unintentionally made a mockery of his Administration’s regulatory actions. Oh, he was trying his best to persuade readers that “We have preserved freedom of commerce while applying those rules and regulations necessary to protect the public against threats to our health and safety and to safeguard people and businesses from abuse.” But he missed his mark.

He wrote that he was signing an executive order requiring federal agencies to “ensure that regulations protect our safety, health and environment while promoting economic growth…Sometimes,” he wrote, “these rules have gotten out of balance.” A recent unbalanced example occurred when the EPA Jan. 14 revoked the permit for the largest mountain-top coal mining operation in West Virginia, for the first time withdrawing a water permit the agency had previously issued. Company engineers told me last year that no damage was done to nearby streams, most of which were no more than gullies that filled with water when it rained.

To justify his heroic plans to shrink regulations, Obama used, as an example that “the FDA has long considered saccharin, the artificial sweetener, safe for people to consume. Yet for years, the EPA made companies treat saccharin like other dangerous chemicals. The EPA wisely eliminated this rule last month.” (Applause, please.)

The President could have cited the EPA’s attempt to declare milk a hazardous chemical as an example of outlandish regulations. New rules would require the dairy industry to handle spilled milk as if it were a hazardous waste and build special structures to prevent runoff. It’s no use crying over spilt milk. But It’s surely an over reach that parts with logic. It “defies common sense,” complained Matt Smego of the Michigan Farm Bureau. Michigan has 2,299 dairy farms that provide a $5 billion impact on the state’s economy.

Obama’s Wall Street Journal article obviously is another attempt to gain the business community’s support and give the impression that he is moving toward the political center. But according to data from the Government Accountability Office, federal agencies promulgated 43 rules during the fiscal year ending Sept. 30, 2010 that cost an estimated $28 billion, the highest level since 1981, the earliest date for which records are available.

The costs of regulation are known as “the hidden tax,” because they are shielded from view and paid for indirectly through higher prices and less innovation. An estimate of total cost was commissioned by the Small Business Administration in September. It came up with the astounding figure of $1.75 trillion costs a year in rules and restrictions. That amounts to $15,000 for every household in America.

According to a major Heritage Foundation study, here are a few of the most costly regulatory actions of the fiscal 2010 year:

*Fuel economy and emission standards for passenger cars, and other vehicles with an annual cost of $10.8 billion for model years 2012 to 2016. For auto companies to recover these costs, National Highway Transportation Safety Administration estimates the standards will lead to vehicle price hikes averaging $457 per vehicle in 2012 and $985 per vehicle in 2016.

*Mandated quotas for renewable fuels: annual cost $7.8 billion (for 15 years). Use of farmland to grow corns and other crops for renewable fuels, mainly ethanol, will displace food crops, leading to food cost increases of $10 per person per year.

*Efficiency standards for water heaters, heating equipment, and pool heaters: annual cost $1.3 billion. Appliance upgrades necessary to comply with the new standards will boost the price of a typical storage water heater by $120.

*Limits on effluent discharges from construction sites imposed by the EPA will cost $810.8 million. The requirement will force the closure of 147 construction companies and the loss of 7,200 jobs. Homeowners will pay some, too, about $1,960 in mortgage costs.

“Measures to reduce regulatory burdens, by contrast, were few and far between in FY 2010,” said the study. Only five significant rulemakings adopted last year reduced burdens.” Savings were reported to be only $1.8 billion. This leaves a net increase of $26.6 billion worth of regulations. One of these measures—though designated as deregulatory–was EPA’s use of the Clean Air Act to determine that greenhouse gases are pollutants. This corralled such unregulated facilities as apartment houses, shopping malls, hotels, restaurants, schools, houses of worship and spots arenas into the embrace of EPA regulation. Strangely, the EPA is prohibited by law from considering the costs in designing its regulations under the Clean Air Act and other major statutes.

“Many more regulations are in the pipeline,” the Heritage study said. Financial regulations in the Dodd-Frank bill “will require 243 new formal rule-makings by 11 different federal agencies. Federal regulators face such a torrent of new rules under Obamacare, the Secretary of the Department of Health and Human Services “has failed to meet one-third of the deadlines mandated by the new federal health care law,” according to a report by the Congressional Research Service.

But don’t blame HHS Secretary Sebelius. Not only are there too many rules in Obamacare, but Sebelius is too busy telling fibs about the law.