INSIGHT: Congress study says Obama is accelerating rulemaking

16 May 2013 17:10 Source:ICIS News

By Joe Kamalick

Business says regulations weigh against themWASHINGTON (ICIS)--A new congressional study seems to confirm what chemical producers and other manufacturers contend - that the Obama administration is a rules-making machine that chews up business and gobbles up growth.

The Congressional Research Service (CRS) said in a multi-year analysis of federal regulatory action that there has been an escalation of rulemaking in the last four years since President Barack Obama took office in January 2009.

According to the CRS study, previous administrations have hardly been slackers when it comes to rulemaking, but the last four years do show a significant advance.

During President George W Bush’s second term, the number of final regulations issued by the federal government was in the range of just under 3,000 annually to 3,300 in ballpark terms.

In the first year of Obama’s first term, 2009, the number of final rules issued by Washington rose to 3,471, according to the CRS study.

It should be noted that some of those 2009 rules likely were carry-overs from the last year of the Bush administration.  Indeed, in 2010, the first full year of the Obama presidency, the number of final rules fell to 3,261.

Regulatory action picked up quickly, however, in the next year, with 3,835 final rules being issued by the Obama White House and its various administrative agencies in 2011.

The flow of rulemaking fell sharply in 2012, according to the CRS, dropping to 2,482 in that year. 

But many in the chemicals industry and elsewhere in US business circles contend that the White House did not want to bombard the nation with a wave of new rules in the run-up to the November 2012 presidential election and consequently throttled back on rulemaking.

(As a consequence, business leaders expect that the newly re-elected Obama team will unleash an even greater flood of regulations and executive orders this year in order to make up for the go-slow election year policy.)

In addition, the Obama White House and the administration’s regulatory agencies have yet to come close to the rulemaking tide that swept the nation during Bill Clinton’s eight years in office, when the number of final regulations were as high as 4,388 annually.

But the Obama administration takes top honours in the special and more costly regulatory category of “major” rules, also known as “economically significant” regulations.

As defined by the 1996 Congressional Review Act (CRA), a major rulemaking is one that is likely to result in:

    • An annual effect on the nation’s economy of $100m (€77m) or more;
    • A major increase in costs or prices for consumers, individual industries, federal, state or local governments or specific geographic regions; or
    • Significant adverse effects on competition, employment, investment, productivity, innovation or the ability of US firms to compete with foreign companies.

While the number of major regulations were in the 50-70 range during the Clinton presidency and stayed closer to the 50-60 field during most of the Bush years, the figure jumped to 94 in the last year of the Bush administration and then rose to 100 in Obama’s first full year in office.

Bill Allmond, vice president for government relations at the Society of Chemical Manufacturers and Affiliates (SOCMA), argues that industry is facing an increasing regulatory burden that has accelerated in recent years.

Referring to “economically significant” regulations, those with compliance costs of $100m or more, Allmond described a snowball effect.

“Over the last ten years, the number of economically significant regulations issued by the federal government has increased by 137%,” he said.

“In the period of 1993 to 2008 there was an average of 36 economically significant regulations issued each year,” he said, “but in the period 2009-2011, the annual average has jumped to 72.”

Allmond said that over the next few years, SOCMA will be focus on trying to secure regulatory reform to lower the cost of doing business in the US and to get government to protect rather than jeopardize American business interests.

The CRS is the investigative and analytical arm of Congress.

($1 = €0.77)

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By Joe Kamalick