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March 28th, 2011

Regulation Is Killing Jobs and the American Dream

By Iowa Congressman Tom Latham

It’s difficult to think of an economic activity in the United States that isn’t regulated by the government at some point or another.  Scores of federal departments, agencies and programs enforce countless regulations that impact what you eat, what you buy and how you engage in commerce.  Some of these regulations protect citizens and provide real benefits.  Others do not.  Too often, the federal government does not take the steps necessary to distinguish good regulations from those that no longer serve a useful purpose or maybe never did.  This can result in regulations that slow and block job growth and obstruct personal freedom.

My desire to eliminate burdensome government regulations and encourage job creation inspired me to run for Congress.  As the owners of our family seed business, my brothers and I ran into outrageous regulatory barriers that cost us time and resources that could have been put to more productive ends.  For example, a particularly onerous regulation required us to measure the dust that was kicked up in the field when unloading soybeans from a wagon and report the data to the government.  Anyone who knows farming understands that the dust ends up back on the field, but the federal government wanted measurements.  Compliance with the requirement imposed significant costs on the business, but the worst part was that the government did absolutely nothing with the reported data to safeguard natural resources or improve farming methods.  This was a regulation that drove up the cost of doing business while providing no benefits in return.  Today, we’ve come full circle with proposals for even more complex regulations on crop dust.

The federal government completes about 4,000 regulations a year (that’s about 80,000 pages of regulations, the equivalent to 400 sizable novels), and dozens of those regulations can have significant economic effects.  These rules pile up year after year, and, although some are modified, they are rarely eliminated.  In fact, there are so many active federal regulations that if you were to read through all of them for eight hours every day, it would take over four years to read them all. This massive collection of regulations has a real impact on the American people, but Congress hasn’t engaged in a large-scale and systematic review of all government regulations in decades.  That, combined with the current economic downturn, makes an examination of how these rules are affecting our economy long overdue.

Government regulations can impact job creation in a number of ways.  New regulations can create uncertainty in the market as businesses wait to find out how they will be impacted by new rules before making decisions to hire new workers or buy new equipment.  When the regulatory burden becomes too great, American employers are put at a disadvantage when competing globally, sending American jobs overseas where the regulations aren’t as stringent.  Some regulations impose new start-up costs that make it more difficult for new businesses to get off the ground.  I can’t tell you how heartbreaking it is to hear a small business owner tell me that had they known the roadblocks that they would encounter with regulations as they were beginning their business, they never would have done so. In fact, it would be very easy to prove that over-regulation is stifling and killing the American Dream.

President Obama has expressed concern about the growing regulatory burden on job creators and has issued an executive order that emphasizes the importance of studying the impact regulations have on the American people.  I applaud his concern, but I question his resolve as his administration has already added over 6,500 pages of new federal regulations with the new health care law, and many more are being written with each passing day.  It will take more than a disingenuous executive order to get our arms around the scope and impact of the federal regulatory burden.

Congress needs to step up its oversight of how federal regulations impact job creation in our country.  Regulation serves an important function in a free market economy, but we have to make sure that our regulatory regime isn’t strangling job growth and personal freedom.  With thousands of new regulations being approved by the executive agencies every year, it’s too easy to lose sight of which regulations are effective and which ones aren’t.

Photo by Dave Davidson

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About the Author

The Iowa Republican





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