Jobs & The Economy: Putting America Back to Work
“It is our generation’s task, to reignite the true engine of America’s economic growth —
a rising, thriving middle class,”
Paring Back Unnecessary Regulations
A common-sense regulatory system has a central role to play in protecting American families, but we should always strive to do that work as efficiently and effectively as possible. President Obama’s plan to make government stronger, faster, and more transparent will cut waste and provide better services for citizens by creating a 21st-century regulatory system – one that protects public health and welfare while promoting economic growth, innovation, competitiveness, and job creation.
As former Administrator of the Office of the Information and Regulatory Affairs explains in the video below, the net benefits, or the benefits minus the costs, of regulations issued through the third fiscal year of the Obama Administration have exceeded $91 billion. This amount, including not only monetary savings but also thousands of lives saved and tens of thousands of illnesses and injuries prevented, is over 25 times the net benefits through the third fiscal year of the previous Administration. These benefits are the result of the Obama Administration's ambitious efforts to establish a modern and effective regulatory system by both reducing costs and issuing smarter rules.
Reducing Regulatory Costs
In January 2011, the President called for an unprecedented government-wide regulatory “lookback,” designed to revisit rules on the books to see if they really make sense. He directed agencies and departments to produce plans to eliminate red tape and to streamline current requirements. As a result of that review, more than two dozen agencies identified initiatives to reduce burdens and save money.
In August 2011, agencies released their final regulatory reform plans, which include hundreds of initiatives that will reduce costs, simplify the system, and eliminate redundancy and inconsistency. The monetized savings from just a fraction of these reforms are likely to exceed $10 billion over the next five years. Significant burden-reducing rules from the Department of Labor, the Environmental Protection Agency, and the Department of Transportation alone are expected to save more than $4 billion over the next five years.
The reforms across the government span a wide range including:
- The Department of Health and Human Services will soon propose to remove unnecessary regulatory and reporting requirements now imposed on hospitals and other healthcare providers, potentially saving an anticipated $4 billion over the next five years.
- The Department of Labor is finalizing a rule to simplify and to improve hazard warnings for workers, likely saving employers over $2.5 billion over the next five years without compromising safety.
- The Department of Transportation is proposing a rule that will eliminate unnecessary regulation of the railroad industry, saving up to $340 million in the near future, and avoiding the risk that regulatory costs will be passed onto consumers.
- By the end of this year, the Internal Revenue Service will eliminate 55 million hours in annual paperwork burdens by consolidating reporting requirements and streamlining various tax forms.
Many of the new reforms focus specifically on small business. For example, the Department of Defense recently issued a new rule to accelerate payments on contracts to as many as 60,000 small businesses, thus improving their cash flow in an economically difficult time.
Perhaps more important, these plans explicitly recognize that the regulatory “lookback” is not a one-time endeavor. Agencies will continue to revisit existing rules, asking whether they should be updated, streamlined, or repealed, and they will do so in close consultation with the public. Ideas are welcome at any time.
Issuing Smarter Regulations
At the same time, the Administration has been issuing smart rules that promise to deliver big benefits for the American people in terms of health and safety. Lives are being saved and injuries and illnesses are being reduced. For example, one rule reduces the stopping distance for trucks by 30 percent, thus averting $170 million in annual property damage, and, most importantly, saving over 200 lives a year. We also took a step to reduce the risk of salmonella in shell eggs, saving dozens of lives a year and eliminating up to 79,000 illnesses annually.
New rules will significantly increase fuel economy in the United States for both cars and trucks. These rules will save consumers billions of dollars at the pump, reduce America’s dependency on foreign oil, and make our air cleaner, thus protecting public health. At the same time, smart disclosure policies are informing the choices of investors, workers, consumers, in areas including education, finance, nutrition, and safety.
These are just a few examples of rules that are producing large benefits – saving lives, reducing accidents and illnesses, and reducing unjustified burdens and red tape. Through a series of ambitious steps, we’ve created a 21st-century regulatory system that is cost-effective, flexible, evidence-based, and modern. The Administration’s regulatory review is already on track to remove billions of dollars of regulatory costs for small businesses and the economy, with far greater savings to come.