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August 25 2014

POTUS Opens the Regulatory Spigot

Patrice J. Lee

Burdensome regulations slow down our economy by raising the costs of doing business for companies and limiting what, how, when, and where they can operate. In a weak economic recovery that needs help to boost private sector growth, the President is doing just the opposite of what’s needed.

President Obama is moving full-speed ahead on dozens of new regulations through the last quarter of 2014. Not only will they hurt business, they may also throw a grenade in camp of his congressional colleagues running for (re)election this November.

During the State of the Union speech in January, President Obama promised  (i.e., threatened) to take a go-it-alone strategy to governing if Congress refused to work with him to advance his agenda. That was no empty threat.

The White House Office of Information and Regulatory Affairs (OIRA) is on target to close 125 rules by the end of the year within two dozen rules currently under review. Compared with 2012, this is a significant rise (on par with pre-2012 levels) in regulations going into the election season. The President had an average of 127 economically significant rules during each of his first three years in office but that dropped 35 percent in 2012 prior to the elections.

Perhaps the key is not that 2012 was a congressional election as much as it was his own re-election year. That should be a sign to his congressional comrades that he is more of a friend of convenience rather than a companion in battle.

The Hill reports:

The pace of rule-making is a stark contrast from the months leading up to the 2012 presidential election, when the flow of rules came screeching to a near halt.

The number of economically-significant regulations that OIRA approved dropped to 83 in 2012, about a 35 percent decline from an average of about 127 rules during each of Obama’s first three years in office.

“The results of the election made people in the Obama administration realize that excessive regulation was a talking point Republicans could use,” said Susan Dudley, a former OIRA administrator during the George W. Bush administration.

The assertion from critics that the Obama administration may have been playing election-year politics during his 2012 campaign was given credence by a government report that came out late last year.

The analysis by the Administrative Conference of the United States (ACUS), an independent federal agency that monitors the government’s rule-making process, found that regulatory delays at OIRA spiked in 2012 as the administration put controversial rules on hold until after the election.

Shapiro, the former OIRA official, suggested President Obama has “less incentive” to protect Senate Democrats this time around than he had to protect himself during the 2012 campaign.

“The president has some reason to put his priorities first, because generally speaking, an individual regulation won’t play as big of a role in a congressional election,” Shapiro said. "It’s hard to see a Senate race turning on that.”

The implications of his regulations will hit small and large businesses alike. Even if, as the former OIRA official notes, no race will turn on a regulation, it may generate enough discontent that can be turned into momentum. That may create a big opportunity for Republicans. In Kentucky for example, the EPA’s climate change rule is giving conservatives a boost because the state stands to lose thousands of coal jobs. It’s hard to defend job-losing policies.

A leader shouldn't allow poll numbers to drive decision-making, and at least in this President Obama is leading. Democrats who want to gain or hold onto seats may wish for a little less of this kind of leadership just now.  

More disconcerting is that he doesn’t care about the effects of his regulations. What will be his response to the thousands of Kentucky coal workers who are put out of work because of his regulations? Perhaps he's calculating that he may be out of office by then so it won’t matter to him.

President Obama has his eye is toward his legacy. There seems little restraint to the activity of his pen, and that is dangerous.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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