Washington View: Avalanche of regulations hurts U.S. recovery efforts
Tuesday, January 8, 2013
Traditionally, the new year is a time for resolutions and new beginnings. Unfortunately, it is also a time when new regulations kick in.
Why should we care? Because complying with regulations costs money -- money that we could otherwise use to pay bills, save for college or create jobs.
Yes, essential regulations are necessary to protect health and safety. But when families, schools, hospitals and employers are buried under tens of thousands of costly, confusing and often contradictory federal, state and local regulations, everyone suffers. Jobs are lost, manufacturers must decide whether to invest billions in new technology or shut down, and the price of just about everything goes up.
How many regulations are we talking about?
There are now more than 170,000 pages of federal regulations. Add to that the untold thousands of pages of regulations from the 29,000 laws passed by state legislatures just last year and you get some idea of what we're dealing with.
The Heritage Foundation reports that the Obama administration added 106 new major federal regulations in its first three years, costing all of us more than $46 billion per year.
Recently, the National Association of Manufacturers estimated that just six proposed or current Environmental Protection Agency regulations would cost up to $884 billion to implement nationwide and $132 billion a year. NAM projects that employers in our state would pay up to $808 million to implement the new rules and $143 million a year to comply.
NAM President Jay Timmons noted, "It is already 20 percent more expensive to manufacture in the United States compared to our largest trading partners, and more regulations from Washington are only digging the hole deeper."
Just how confusing are some regulations? Consider that one rule from Obamacare took 18 pages to define a "full time employee."
More on the way
What's more, regulations are continuing to roll out from laws passed years ago.
For example, the Dodd-Frank law passed in 2010 covers every aspect of financial markets and banking. So far, the 848 page law has spawned 8,843 pages of regulations. But that represents only 30 percent of the rules required. At this rate, this one law will produce almost 30,000 pages of new regulations.
Too often, people think regulations affect only businesses. Not true. In fact, sometimes they hit home -- literally.
In 1983, when our home septic system failed, we suggested to the county that we simply rebuild it. The county denied our application because the drain field was within 50 feet of our pasture. Why did that matter? The county had declared our field to be a protected wetland because it became soggy during the winter due to heavy rains.
Because of various county demands, we had to hire an engineering firm and install a much more elaborate, complicated and expensive septic system. Instead of a $5,000 repair, it cost us $16,000 -- equivalent to almost $40,000 today.
We had to refinance our house to pay the bill.
In the 1800s, French historian Alexis de Tocqueville warned that too many regulations can sap a nation's entrepreneurial spirit. Overregulation, he noted, "compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd."
Regaining our nation's economic strength will require boundless energy, risk-taking and entrepreneurial spirit. If we are to recover, we cannot continue to suffocate families, employers, schools and hospitals beneath a crushing, endless avalanche of costly regulations.
Don Brunell is president of the Association of Washington Business, Washington state's chamber of commerce.