Saturday, March 4, 2017

Ending Job-Killing Regulations

TRUMP MOVES AGAINST EXCESS REGULATIONS, by Frank Vernuccio, 3/2/17, Affluent Investor

There are substantial reasons for President Trump’s move to make significant cuts in federal regulations. The executive order, “Reducing Regulation and Controlling Regulatory Costs,” directs agencies to eliminate two current regulations for every new one initiated. The goal is to set annual limit on the cost of new regulations, according to sources close to the President.

The White House had previously noted that “In 2015 alone, federal regulations cost the American economy more than $2 trillion. That is why the President has proposed a moratorium on new federal regulations and is ordering the heads of federal agencies and departments to identify job-killing regulations that should be repealed.” The move is the second action by the new Administration affecting the over-regulation crisis.

On January 20, the same day as the Mr. Trump was inaugurated, a memorandum entitled “Regulatory Freeze Pending Review” was issued. That measure read, With respect to regulations that have been published in the  [Federal Register] but have not taken effect, as permitted by applicable law, temporarily postpone their effective date for 60 days from the date of this memorandum… for the purpose of reviewing questions of fact, law, and policy they raise.

The reasons for the White House moves are substantial. As the New York Analysis of Policy and Government reported in 2016, President Obama broke records when it comes to over-regulating the American people.  Research by the Competitive Enterprise Institute (CEI) indicates that the Administration was on pace to enact 89,416 regulations in 2016. In mid-October, the total had already reached the 70,318 mark.

CEI notes: Six of the seven all-time high federal register page counts have happened under the Barack Obama administration. So this year is set to be a massive record-breaking year in terms of rulemaking, at least according to Federal Register heft. It is quite likely the Federal Register could top 90,000 pages.

Washington’s addiction to regulation is more than just a nuisance. The CATO institute asserts that “It is widely recognized that excessive regulation is unnecessarily killing jobs.”

The Daily Signal found that, Job-creating entrepreneurs in the United States have been dispirited by the scope and cost of escalating red tape…Since 2009, the expansion of Uncle Sam’s regulatory control has been one of the prime culprits in America’s startling decline in economic freedom and overall competitiveness. Each new edict has meant a new government bureaucracy that entrepreneurs and producers must navigate. Worse, the trend of overregulating our economy has also bred cronyism and tarnished our free-market system.

As reported in the 2015 Index of Economic Freedom, an annual study that benchmarks the quality and attractiveness of the entrepreneurial framework across countries, the United States remains stuck in the second tier economic freedom rank of the ‘mostly free,’ with its business freedom score plunging to the lowest level since 2006. This increased regulatory burden, aggravated by favoritism toward entrenched interests, has notably undercut America’s historically dynamic entrepreneurial growth. A 2014

Brookings Institution analysis shows that with business exits now exceeding new business formations, entrepreneurial dynamism in the United States has been steadily dwindling. In light of the excessive and costly regulatory environment, it is not surprising that America’s ongoing economic recovery has been far from dynamic. Fewer Americans can prosper in this overregulated economy.

The cost of compliance with the tidal wave of regulatory mandates is overwhelming. CEI estimates that in 2015, regulatory-related expenses were approximately $1.88 trillion, 10% of the entire American GDP and over 5 times the cost of federal corporate income taxes that year. It’s not only businesses that have been impacted. The Competitive Enterprise Institute has also found that regulations cost each US household “$14,974 annually in regulatory hidden tax, or 23% of the average income of $65,596.

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