Lie, Damn Lies, and Statistics
This was Chairman Cobles (R, NC-6) opening statement for the House Committee on the Judiciary on February 27, 2012. He observed the Department of Labor concluded that unemployment is at 8.3% compared to 10% last October. Asserting that the federal government destroys jobs, and Congress is unable to create jobs, puts the American people between a rock and a hard place. Cobles credits the low unemployment rate to all the regulations that are coming from the Obama Administration. Comparing to previous President George W. Bush, who had an average of 63 annual regulations, President Obama delivers 88 annual regulations. Additionally the number of economically significant regulations, which were released biannual, under President Bush ranged around 77, while President Obama churns out 125 economically significant regulations biannually as well. According to the Heritage Foundation, President Bush accumulated $6 billion in regulatory costs, while President Obama had accrued $40 million in regulatory costs. These daunting reports is why he proposed the Regulatory Freeze for Jobs Act of 2012 (Freeze Act), which freezes regulations until the unemployment rate is at or below 6%. Cobles similarly claims this will provide small businesses with a long needed rest from regulations.
Solving a Non-Existent Problem
Representative Cohen (D, TN-9) brought out fighting words during his opening statement. He claims that the Freeze Act is “an instrument that creates a mistaken cure for a problem that does not exist.” Further reiterating that there is no link or data, to connect regulation to unemployment, and to say there is, is nonsensical. According to him, the purpose of this act would be to take away from executive power, and to further destroy the middle class through laws and policies like these. According to the National Federation of Independent Business’ the reason for the lack of hiring is 45% due to the damping business confidence and only 10% was caused by regulations. Additionally, the Wall Street Journal wrote that small businesses are not hiring because of the lack of demand and sales, not because of economic uncertainty. Instead he claims unemployment is tied back to the housing industry, and the lack or regulation of the financial service industries caused by the Bush Recession. Mr. Cohen specified that there are redundant regulations and that offices, like the Environmental Protection Agency do cost people a lot of money, however he firmly believes that discussing the Freeze Act is “not worthy of this committee.”
Be Afraid, Very Afraid!
Quick to point out that this was the ninth hearing, on how regulations hinder job creation, Representative Conyers (D, MI-14) did not have a very positive outlook on today’s testimonies. Similar to Mr. Cohen, he reasserts that the Freeze Act will only deter the economy from its recovery. The act will prevent regulations that cost a small amount and possess a public benefits from passing. Conyers is bold enough to say that the sponsors of the measure did not intend to deliberately jeopardize the public’s safety and security, by forestalling regulations, simply because of their anti-regulatory agenda. Conyers, again agreeing with Cohen, reaffirms that there is no credible evidence that regulations have any substantive impact on job creation.
A Little Bit of Both
The first witness is Mr. Meltzer, a long-term professor at Carnegie Mellon University, who shared values seen on both sides of the argument. One on hand, Meltzer supports the Freeze Act and acknowledges it is not an anti-regulation bill, and it does not oppose regulation. In his opinion, it instates badly needed priorities to recover the economy and reduce unemployment. He credits the slow growth, and says it will continue at this rate, because investors are uncertain on future taxations and regulations. However, he does agree with Cohen about the general state of regulations. Even if the regulations are well intentioned, some are blatantly “wrongheaded,” ineffective, and do not accomplish what they are trying to do.
Mr. Taylor from Stanford University provided another truth in testimony, which came to the defense of the Freeze Act. His concern about the recovery process is stemmed from the similar situation the United States was in during the 1980’s. Where the growth average for the United States today is at 2.4%, it was at a much higher rate of 5.9% during the 1982. Taylor supports the bill for several reasons, one being the lack of hiring due to a lack of demand on account of regulations. He states that small business cannot anticipate what regulations are going to be put into effect.
Mr. Weissman, the president of Public Citizen, Inc., gave the last testimony in which he shows his disfavor of the Freeze Act. He feels the legislation is a misguided way to address the economic problem, which will end up putting the economy in a five year moratorium. Some of his significant points included that there is no evidence that supports the claim for job preservation or creation within the Freeze Act. Additionally some legislation that would be passed during the time of the freeze posses a cost benefit, of about 2-15 times, according to the Office of Management and Budget. His last argument for the support of regulations is that they make our country stronger, more prosperous, safer, healthier, cleaner, and more livable. While during the instated freeze, legislation that promotes food safety, and advancement in biotech pharmaceuticals, and even prevent new rules that would benefit veterans and the sick.
By: Conor O’Malley