Obama Vows to Cut Regulatory Burdens on Business

by | Jan 19, 2011

President Barack Obama has promised to ease “absurd and unnecessary paperwork requirements” – and the Environmental Protection Agency (EPA) is not immune.

Obama yesterday signed an executive order directing agencies to remove outdated regulations that have a negative impact on the economy.

The president outlined the order in a Wall Street Journal editorial. He wrote that some government rules have placed unreasonable burdens on business, “burdens that have stifled innovation and have had a chilling effect on growth and jobs.”

He added, “We are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb.”

On the other hand, examples of necessary regulations include new safety rules for infant formula and fuel-economy standards for cars and trucks, Obama said.

As an example of a recent achievement in cutting red tape, Obama cited an EPA decision to loosen regulations on the artificial sweetener saccharin, which he said the FDA has long considered safe for consumption.

“If it goes in your coffee, it is not hazardous waste,” Obama wrote.

The executive order says that agencies must work to protect public health, welfare, safety and the environment while promoting economic growth, but must also design their regulations to impose the least burden on society. The document that as much as possible, agencies should specify performance objectives rather than dictate the manner of compliance, and says they should identify alternatives to direct regulation, including economic incentives and providing information to the public.

The order says that some sectors have faced “a significant number” of regulatory requirements, some of which may overlap or disagree, and says greater coordination among agencies could simplify these rules and reduce costs.

The order requires agencies to, within the next 120 days, develop preliminary plans for periodical regulatory reviews.

Obama wrote that he is directing federal agencies to do more to reduce regulatory burdens on small business.

“Manufacturers appreciate President Obama‘s call for a government-wide review of regulations and rules,” said Aric Newhouse, senior vice president for government relations and policy at the National Association of Manufacturers. “Manufacturers have been saying for some time that over-regulation is harming job creation and stifling economic growth.”

Republicans and moderate Democrats have recently introduced a number of bills aimed at cutting red tape. In the last session, Sen. Jim DeMint (R-S.C.) and Rep. Geoff Davis (R-Ky.) introduced the REINS Act, which would require congressional approval for any new rule that would cost $100 million or more or have a significant impact on the price of goods and services.

Pictured: Obama signs H.R. 2751, the “FDA Food Safety Modernization Act”.

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