Diving Off the Regulatory Cliff

While Americans wait ever-anxiously for our elected leaders to hammer out a solution to the so-called fiscal cliff, business leaders and economic analysts have already watched the country fall off what could only be described as a cliff of its own.  The Obama administration has sent the nation plummeting into a sea of anti-business, anti-growth red tape over the last few years, but even as the economy struggles to regain any traction, the White House is intending to accelerate the rate of descent.

Welcome to the ‘regulatory cliff’.

During a meeting in December of 2008 between Barack Obama and a team of his top economic advisers, the President-elect told his group that “government should help facilitate private ventures by removing bureaucratic red tape.”

But the amount of red tape brought about by the administration has hit unparalleled levels. In September, FreedomWorks reported on an expansion of the federal publication known as the Code of Federal Regulations.  In his first three years, Obama had expanded the code book by over 11,300 pages.  

In the last 90 days, Regulations.gov reports that there have been 5,836 newly posted regulations; 287 in the last three days alone.

While the fiscal cliff is dominating headlines, the administration’s rapid expansion of regulations should not be ignored.  The burdensome numbers in play for the American economy via the regulatory cliff sound eerily similar to the deficit itself.

In an op-ed for Reuters, Rep. Sam Graves (R-MO) writes:

“The Obama administration has pursued an active regulatory agenda. The overall regulatory burden is now $1.8 trillion annually, according to the Competitive Enterprise Institute, and this year alone new rules have added $215.4 billion in compliance costs.”

It isn’t just the direct staggering effect these regulations have on businesses – it’s the uncertainty surrounding what the White House is doing.  Despite the President’s rhetoric, transparency when it comes to the regulatory cliff has been nearly non-existent.  

An October report from Republican Sen. James Inhofe indicated that the EPA specifically “punted” on numerous regulations in an attempt to “earn votes” for a second term.  A report from the American Action Forum (AAF) backs this up, essentially explaining how Obama had all but ended review of new regulations for the sake of election-year politics.

One such example can be seen with Obamacare regulations that will slap taxpayers with a $1 billion price tag, a review of which was held off until after the election.

“For example, the Affordable Care Act (ACA) created two rulemakings mandating that vending machines and restaurants display nutritional information.  The proposed version of the menu labeling regulation was expanded to include grocery stores and virtually all food service chains.  The total cost for the pending ACA rules is more than $1.1 billion, with 1.4 million paperwork burden hours.  Both rules are scheduled for release this month.”

Additionally, the administration illegally failed to meet a deadline for releasing regulatory plans for the coming year.  In a recent letter to the President, Senator Rob Portman (R-OH) spells out the legal obligation for openness: 

“For nearly three decades, presidents of both parties have published their plans for new regulations twice a year.  This practice is legal obligation grounded in a longstanding executive order and a federal statute that calls for a spring and fall regulatory agenda. On August 30, 2012, I wrote to inquire why your Administration’s Spring 2012 Regulatory Agenda had not been made public.  I received no reply.  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.”

Obama’s bureaucrats have refused to level with the public about the impact of their regulations.  Without that knowledge, without that transparency, the effect on businesses (or job creators) can be staggering.

Graves writes:

“During a lethargic economic recovery, Washington must come together to create an environment for strong private-sector growth. In addition to keeping taxes low, we must ensure that small businesses aren’t pushed off the regulatory cliff.”

Will the President listen?

In order to prepare, small business owners in America need, and deserve to know what new regulations are coming down the pike. Being forthright with the American people is the least President Obama can do to help businesses and the economy.