OPINION:
Although members of Congress agreed to raise our nation’s debt ceiling above $14.3 trillion just in time to avoid an economic nightmare, it’s certain they will continue battling over how much federal spending should be cut and how much taxes should be raised.
Both sides should come together on a third way to help Uncle Sam return to fiscal health: eliminating harmful regulations that reduce tax revenues by weakening private-sector businesses, which are the key to firing up America’s mighty engine of economic growth.
The beauty of this third way is that instead of forcing Congress to argue over how to divide up the pain and sacrifice of spending cuts or tax increases, it would enable Congress to share with the American people the benefits of increased federal revenue generated by a more prosperous economy.
When businesses grow, they hire more workers, buy more goods and services and give the American economy a shot in the arm. Every step of the way, this economic activity generates more tax revenue for governments at all levels without any increase in tax rates or elimination of deductions.
For example, the use of hydraulic fracturing to produce natural gas in the Marcellus Shale formation has created tens of thousands of new jobs in Pennsylvania, according to studies, with additional jobs in neighboring states. All this activity is producing millions of dollars in new tax revenue.
Economic growth has always been and always will be the key to American prosperity. But instead of nurturing desperately needed private-sector growth, the Obama administration is drowning American businesses in a tidal wave of costly and sometimes conflicting regulations - and threatening to impose still more regulations and a slew of tax increases as well.
This perfect storm of additional regulations and taxes would actually subtract revenue from government by raising unemployment, holding down wages, decreasing American exports and weakening our manufacturing sector.
Too often, the Environmental Protection Agency (EPA) and other federal regulatory agencies fail to understand the meaning of the term “cost-benefit analysis.” They pursue extreme regulations that generate minimal benefit or no benefit at a terrible cost to workers, consumers, our national economy and our national security.
No reasonable person would argue against all government regulation. Regulations have achieved a great deal over the years.
For example, fuel manufacturers alone have spent nearly $50 billion to remove sulfur from gasoline and diesel fuel and to manufacture reformulated gasoline. Overall, total emissions of the six principal air pollutants in the United States have been reduced by 54 percent since 1980, and our nation’s residents have experienced falling ozone levels across the country for two decades.
But despite this historic progress and the fact that our air continues to grow cleaner, the EPA is expected soon to dramatically lower ground-level ozone standards to an amount approaching naturally occurring ozone levels in rural areas. Business groups are asking President Obama to block these standards because the EPA estimates they could carry up to $90 billion in annual compliance costs. A study by the Manufacturers’ Alliance estimates the standards could cost 7.3 million U.S. jobs by 2020.
To a degree unprecedented in any nation, federal restrictions prevent America from producing oil and natural gas in vast areas of our nation and off our shores. Extracting these valuable resources and using them to manufacture fuel and petrochemicals here at home would keep billions of dollars in America, support millions of American jobs and make us less reliant on foreign nations.
While the examples above deal with the oil and natural-gas sectors, other areas of our economy have been caught up in the destructive tidal wave of federal regulations as well. Sometimes the same agencies impose conflicting regulations that can’t all be followed simultaneously, demand that manufacturers use substances that don’t exist or worsen one problem in an attempt to fix another.
The most ardent federal regulators need to understand that they can’t change the laws of physics, chemistry and economics. They can’t regulate every microscopic particle they dislike out of existence or outlaw even the slightest risk without regard to how many billions or trillions of dollars it would cost.
President Obama called for compromise, common sense and reasonableness in reaching an agreement among opposing sides in Congress to raise the federal debt ceiling. Now he needs to reach out to America’s private sector to reach agreement on a level of regulation that best serves our national interest and generates jobs, tax revenue and a prosperous economy to benefit the American people.
Charles T. Drevna is president of the National Petrochemical and Refiners Association.
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