By Kevin Bogardus and Elise Viebeck - 01/19/11 12:20 AM EST
In an op-ed in The Wall Street Journal, President Obama said the country’s “excessive” and “inconsistent” regulations have sometimes had a “chilling effect” on job growth and — in a nod to the priorities of the new House Republican majority — observed that small businesses often bear the burden.
To accomplish that, Obama signed an executive order Tuesday that would direct agencies to explain how their regulations are cost-effective and cost-justified. In addition, existing rules that are found to be outdated will be changed or repealed.
The review comes as the administration implements a bevy of sweeping measures passed last year by the Democratic-controlled Congress, including the healthcare and financial services laws. Regulations stemming from those laws will be fiercely contested by a number of business groups in the years ahead.
Trade associations like the U.S. Chamber of Commerce and the National Federation of Independent Business (NFIB) applauded the planned regulatory review by the White House. Many also took the opportunity to suggest what proposed rules should be on the chopping block.
“We welcome President Obama’s intention to issue an executive order today restoring balance to government regulations,” said Tom Donohue, the Chamber’s president and CEO, in a statement. “No major rule or regulation should be exempted from the review, including the recently enacted healthcare and financial reform laws.”
“The high cost of regulation on small business warrants special attention, and I welcome the president to call on us for input,” said NFIB President and CEO Dan Danner in a statement.
Under the executive order, agencies will be encouraged to help small businesses comply with regulations by offering them extended compliance dates or partial or total exemptions from the rules. The White House also hopes to increase transparency by having agencies increase their use of the website regulations.gov to post more rules and comments for public review.
In his op-ed, Obama said his administration would make it its “mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb.”
Obama has taken pains to repair his strained relationship with the business community in light of bruising fights over the Wall Street and healthcare reforms, legislation that Republicans and business groups say will hurt job creation.
On a conference call with reporters Tuesday, senior administration officials said the executive order has been in the works for about a year. One official said regulatory “hit lists” offered by business groups in the past, like the Business Roundtable, would not guide the review effort.
“While we are interested in comments from everybody, no particular list is going to be organizing our efforts,” said the official.
Prominent House Republicans praised the president’s review as a step in the right direction.
House Oversight Committee Chairman Darrell Issa (R-Calif.) said he looks forward to “providing the president with insights” related to his regulatory reform push. Since the November election, Issa has written letters to more than 150 trade groups asking for their thoughts on which of the administration’s regulations need oversight.
House Majority Leader Eric Cantor (R-Va.) also welcomed Obama’s move.
“Today’s executive order from President Obama shows that he heard the same message I did in the last election — that Americans are sick and tired of Washington’s excessive overreach and overspending,” Cantor said in a statement, adding that he thinks the plan doesn’t go far enough in overturning regulations.
The White House plan was met with despair by some liberals.
“By casting the discussion in those terms, the president swallows the GOP’s frame for the debate hook, line and sinker,” said Rena Steinzor of the Center for Progressive Reform in a statement.
“As for the argument that we need to loosen regulation in order to create jobs, the believers in this superficially appealing bit of dogma have yet to cite research showing that regulations are slowing the economic recovery,” said Steinzor, also a professor at the University of Maryland Law School. “They just serve up the assertion, in part to distract us from the hard reality that it was deregulatory fervor that got us into this mess in the first place.”
A senior administration official said the White House did not consider politics when it planned the regulatory overhaul.
“The notion that it’s left or right or center, frankly, is less relevant than [whether] what we are doing is what is right for the American people and [whether we are] getting to the point where we are maximizing growth while maximizing health and safety,” the official said. “I would hope that is something that people left and right can agree on.”