Employers doubt Obama’s vow of less red tape

Businesses big and small aren’t buying President Obama’s claim that he’s reducing the burden of costly federal regulations, a major barrier to job growth.

“It’s a mirage,” said Dan Bosch, manager of regulatory policy at the National Federation of Independent Business. “The final rules that are coming out in the last two years are worse.”

The U.S. Chamber of Commerce is sponsoring a nationwide tour this summer by former Sen. Evan Bayh, Indiana Democrat, and former Bush White House Chief of Staff Andrew H. Card Jr. to call for “common-sense” regulatory reform. Among the states they will visit are Wisconsin, Georgia and West Virginia, as well as the president’s home base of Illinois.

And House Republicans held events in their districts last week focusing on their “Plan for America’s Job Creators,” featuring calls for lower business taxes and fewer regulations. At a meeting with local business leaders in his district, House Republican Conference Chairman Jeb Hensarling of Texas said firms are facing an “avalanche” of government rules.

“Entrepreneurship is currently at a 17-year low, not because of a lack of capital, but because of a lack of confidence,” Mr. Hensarling said.

In turn, the White House launched a publicity offensive in the past week to counter industry’s belief that the administration is failing to streamline regulations. Cass Sunstein, the president’s regulatory czar, gave a speech on Capitol Hill and wrote an Op-Ed, contending that the first two years of the Obama administration produced fewer regulations than the last two years of the presidency of Republican George W. Bush.

“We are eliminating unnecessary regulatory burdens and tens of millions of hours in red tape,” Mr. Sunstein said.

Bill Kovacs, the U.S. Chamber of Commerce’s vice president for environment, technology and regulatory affairs, said in a blog post that Mr. Sunstein’s claims of fewer regulations in the Obama administration are “disingenuous.”

Mr. Kovacs noted that the Government Accountability Office said there were 178 major rules reported to Congress in the final two years of the Bush administration, compared with 195 such rules in the first two years of the Obama presidency. And a Competitive Enterprise Institute study found 339 “economically significant” rules, defined as costing $100 million or more, in the last two years under Mr. Bush, but 408 such rules in the first two years of the Obama administration.

Mr. Obama declared at a news conference that a review he ordered of 30 federal agencies has “already identified changes that could potentially save billions of dollars for companies over the next several years.”

The issue of excessive regulation, a perennial debate, is gaining more attention now because Mr. Obama is trying to persuade industry to spend more of its $2 trillion in idle capital to create jobs. The unemployment rate in May was 9.1 percent, a level at which no incumbent has ever been re-elected.

Even as Mr. Obama tried to persuade industry last week that he is serious about cutting regulations, the president in the next breath seemed dismissive of business leaders’ complaints.

“Keep in mind that, the business community is always complaining about regulations,” Mr. Obama said. “When unemployment’s at 3 percent, and they’re making record profits, they’re going to still complain about regulations because, frankly, they want to be able to do whatever they think is going to maximize their profits.”

Economist Veronique de Rugy of the conservative Mercatus Center at George Mason University said the president implied there is something wrong with responsible businesses seeking to be as profitable as possible.

“That’s what entrepreneurs do — make money,” Ms. de Rugy said. “Imagine that.”

She said Mr. Sunstein’s claims about less rule making in the Obama administration don’t hold much weight, because businesses are also worried about regulations in the pipeline. That especially includes the Dodd-Frank law governing Wall Street (with more than 440 suggested rules) and the Obama health care law.

“Obamacare is going to be a gigantic burden on firms, and it introduces gigantic uncertainty into the economy,” Ms. de Rugy said. “It’s going to take years to know all the rules.”

Mr. Sunstein, administrator of the Office of Information and Regulatory Affairs, cited several examples for employers to be more optimistic, including the Occupational Safety and Health Administration eliminating 1.9 million hours of redundant reporting requirements, the elimination of wording in a rule that subjected milk producers to abide by the same regulations governing oil spills, and the simplification of student-aid forms.

In defense of the administration, Mr. Sunstein also provided examples of “consumer-friendly” rules that are, in effect, new regulations — new labels on sunscreen requiring more accurate claims about protection, and the replacement of the “food pyramid” with a “food plate,” which he called “widely praised.”