White House takes steps to cut red tape

The Obama administration on Monday took new steps to scale back regulations that are thought to hinder business growth.

By executive order, the White House asked a number of independent regulatory agencies — including the Federal Reserve, the Securities and Exchange Commission and the Federal Communications Commission — to examine their existing rules and alter or eliminate those that are outdated, ineffective or simply not worth the cost of enforcing.

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Because the targeted agencies are independent, their compliance is strictly voluntary. Still, the administration said eliminating the red tape would give the economy a shot in the arm.

“The process of rethinking rules that could be streamlined — or eliminated, in some cases — frees up money and allows businesses, and particularly small businesses, to do what they do best, which is to grow, promote economic development and hire people,” Cass Sunstein, a Harvard Law School professor who leads the White House Office of Information and Regulatory Affairs, said during a press call announcing the order.

Obama urged the agency heads to view the executive order “as an opportunity to do something big and lasting — to change the ways of Washington; to focus on what works; and to forge a 21st-century regulatory system that makes our economy stronger and more competitive.”

The move is the latest White House attempt to bolster its standing in the eyes of the business community. The president announced a government-wide review of regulations in January. 

The outreach on regulations has angered liberal groups and unions, which question why the administration has made killing regulations a priority at a time of high unemployment.

Congressional Republicans have been clamoring for the elimination of federal rules they say have discouraged hiring and prolonged the national jobs crisis.

Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, called the new White House order “constructive” and “a step in the right direction.” Still, he said, there’s plenty more that policymakers can do to weed out unnecessary federal requirements.

“We must … do more than just examine rules and regulations — we must cut and fix where necessary and also solve problems that are identified in the rulemaking process in general,” Issa said in a statement. “Doing this will have an immediate impact on job creators and will help put us on the path to real economic recovery.”

Adding urgency to the jobs debate, the Labor Department on Friday reported that the economy created only about 18,000 jobs in June, as governments shed 39,000 workers and private-sector hiring lagged.

In January, the White House issued a similar order requiring all executive agencies to review their rules in search of inefficiencies or redundancies that could put unnecessary burdens on businesses — a process that led to 30 separate agency proposals to streamline government rules.

The January order did not apply to the independent agencies, Sunstein said, for the simple reason that they operate separately from the White House. The success of the initial program, however, convinced administration officials to expand their reach.

“That process was extraordinarily successful,” Sunstein said. “They’re producing immediate benefits in the form of millions of hours of paperwork burdens eliminated and over $1 billion in annual regulatory costs eliminated.”

The White House has asked the independent agencies to come up with streamlining plans within 120 days. The plans would then be subject to a public comment period.

Among the other independent agencies the White House is targeting are the Federal Deposit Insurance Corporation, the Federal Energy Regulatory Commission, the Federal Housing Finance Agency and the Nuclear Regulatory Commission.

Congress has also taken steps this year to ease the regulatory burdens on the nation’s businesses. In April, lawmakers overwhelmingly approved legislation repealing a controversial IRS-reporting requirement — a provision of the new healthcare reform law — designed to ensure that businesses don’t evade taxes.