Targeting Regulations

“Hit the bull’s eye!”, was the chant from the carnival worker as we walked past his both at the Kansas State Fair. Juggling baseballs in his hands, he tempted onlookers to win the big prize. In today’s economy we will find recovery if we aim at regulatory reform and hit the target. The prize will be new jobs, opportunity and the recovery for which we hope.

American businesses are struggling under regulatory burdens

The problem is the bull’s eye is painted on those who create jobs in America and regulatory agencies are taking their shots. Pick any business, large or small, and you will find each of them struggling with current and proposed regulations. Each of them consumes resources to muddle through an ever increasing burden of regulations making us less competitive and more in want for economic recovery.

In the financial world the Dodd-Frank financial regulatory law passed nearly a year ago has 385 proposed new rules which have created hesitation in the industry. To date, only 24 of the requirements have been completed according to Louise Story at the New York Times. http://www.nytimes.com/2011/06/07/business/07derivatives.html At this rate the uncertainty will go on for another 15 years, driving up costs and slowing transactions and delaying economic recovery.

Job creators will bear the brunt of the Healthcare Reform Act

The much heralded The Healthcare Reform Act targeted every American but it is the job creators that bear the brunt of the battle. Health and Human Services (HHS) has proposed such complicated rules and regulations that most companies are searching for waivers. All the smoke of lower healthcare costs has been blown away by the winds of regulatory red tape, hurricane winds.

For many who are trying to keep and create jobs it is less expensive to pay the laws 8% payroll penalty and force employees on to Medicaid rather than purchase private health insurance, deal with the healthcare law’s regulations, and absorb the associated costs. Medicaid is supplemented by federal and state taxes forcing state budgets into deficits at level never before seen. The Senate Finance and House Energy and Commerce Committees study found states face at least $118 billion increase in their state deficits over the next 10 years because of President Obama’s Healthcare Reform Act. Absorbing those deficits will come at the cost of American jobs.

Regulations intended to level the playing field for American businesses instead help the foreign supplier

The Federal Acquisition Regulations (FAR) were meant for a level economic playing field for American businesses when bidding on contracts with the government but the Pentagon uses them differently. In the competition for the Light Air Support (LAS) aircraft the United States Air Force (USAF) allowed foreign supplier Embraer to subsidize their bid with help from the Brazilian Air Force and completely overlooked the use of illegal start up subsidies worth millions of dollars. However, the USAF through the FAR, requires the American competitor, Hawker Beechcraft, to include the all similar costs of their product from start up to delivery, hardly the parallel playing field intended. Here regulations may result in tax dollars not only outsourcing jobs but an entire weapons system. And, once again, the target is the job creator.

Adoption of S.385, Regulator Responsibility for our Economy Act of 2011, would help remove the bull's eye on job creators

Robert Frost’s Poem, “Storm Fears” starts with the line, “When the wind works against us”. Certainly, regulations can and do work against an economic recovery. Thankfully, Senator Roberts, R-KS has filed legislations, S.385, Regulatory Responsibility for our Economy Act of 2011, which requires federal agencies to determine that the benefits of regulations justify their costs, impose the least burden on society, and maximize economic benefit, among other good reform ideas. Adoption of this bill would move our economy towards recovery and hopefully remove the bull’s eye on America’s job creators. As in the ending line of “Storm Fears”, perhaps we can find it within us “to arise with day, And save ourselves unaided”.

Todd Tiahrt is currently the president of Todd Tiahrt, LLC consulting in aviation and aerospace. He was a Member of Congress from 1995 to 2011