Obama Makes Nice Over Regs

President Barack Obama today addressed the business community’s concerns over excessive regulation by ordering a review of federal rules already on the books and directing agencies to make sure the benefits of new regulations justify their costs.

Consistent with the law, agencies should choose regulatory options that pose the least burden on businesses and consumers, according to the president.

Obama also strengthened enforcement of a law that requires federal agencies to give special attention to the burdens their regulations impose on small businesses. Agencies now will be required to provide written justification when they don’t consider giving additional flexibility to small businesses, such as exemptions from rules, extended compliance dates or streamlined reporting requirements.

The president’s actions pleased Tom Sullivan, who runs the Small Business Coalition for Regulatory Relief and was chief counsel for the Small Business Administration's Office of Advocacy during President George W. Bush’s administration.

“Through Republican and Democratic administrations, the Office of Advocacy has repeatedly criticized EPA, OSHA, and other agencies when they issued rules that unnecessarily harm small businesses,” Sullivan said. “President Obama is finally telling agencies to follow the Office of Advocacy’s advice.”

House Majority Leader Eric Cantor, Republican of Virginia, also had good things to say about Obama’s executive order.

“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.

Senior administration officials, however, said today’s guidance has been in the works for months and is consistent with the regulatory strategy the administration has been pursuing all along.

In an op-ed column in today’s Wall Street Journal, Obama wrote that the goal of looking back at existing rules is “to remove outdated regulations that stifle job creation and make our economy less competitive.” The review “will help bring order to regulations that have become a patchwork of overlapping rules.”

This review doesn’t mean that his administration will stop issuing new regulations.

“We won’t shy away from addressing obvious gaps: new safety rules for infant formula; procedures to stop preventable infections in hospitals; efforts to target chronic violators of workplace safety laws.”

But the administration will seek “more affordable, less intrusive means” to achieve the results desired from regulations, he wrote.

The National Association of Manufacturers appreciated Obama’s executive order, but is looking for action on specific rules that it claims are stifling economic growth.

“This is an opportunity for the president to demonstrate results by eliminating unnecessary regulations already in the pipeline or delaying poorly thought-out proposals that are costing jobs,” said NAM senior vice president Aric Newhouse. “For example, the Environmental Protection Agency’s proposals—from regulating greenhouse gases to the Boiler MACT rule—are a real threat to America’s job creators.”

Sullivan said Congress should take additional steps to protect small businesses from excessive regulation by requiring agencies to consider the indirect impact—as well as the direct impact—of their regulations. For example, EPA should consider how electricity and transportation costs would be affected by regulations limiting carbon emissions, he said.

Public-interest groups have nothing to fear from Obama’s executive order, which provides more opportunities for the public to make a case for additional regulatory protections, said Michael Livermore, executive director of the Institute for Policy Integrity at New York University’s School of Law.

“This move demonstrates the administration’s belief that when cost-benefit analysis is done right, the facts often support stronger protections,” Livermore said. “In the long term, this order is likely to displease those industry groups that want less regulation without regard to public benefits.”

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Kent Hoover is the Washington bureau chief for bizjournals.