Ever since the financial crisis and Great Recession, the United States economy has endured a sluggish recovery.
Much of that stems from lackluster business investment. As J.D. Foster, the U.S. Chamber's chief economist, points out it “has now declined three quarters straight at an average clip of -0.8 percent.”
One reason Foster cites is the growing federal regulatory burden.
The Wall Street Journal editorial board notes that Obama administration regulators hit a milestone that businesses wish it wouldn’t have [subscription required]:
President Obama’s regulators have completed their 600th major rule. A major rule imposes costs of more than $100 million. For those keeping score, that’s an average of 81 big ones a year, or roughly one every three days the government is open. Who says our bureaucracies are inefficient?
The two George W. Bush terms were no deregulatory prize, contrary to progressive myth, having pushed out 496 major rules. These included such charms as rules to implement Sarbanes-Oxley and the expansion of Medicare. But Team Obama has already exceeded that by 20%, with 100 new major rules in the last year, and this crowd still has six long months to go.
Sam Batkins of the American Action Forum, who did the study, calculates that the economic cost of all this adds up to $743 billion, based on data provided by federal agencies.
This conservative $743 billion estimate is more than the combined GDP of Norway and Israel.
These rules impose real, tangible costs for businesses and workers.
Last year, EPA unleashed its water rule and Clean Power Plan onto the economy that, if upheld by the courts, will make it harder to build factories and provide them with reliable electricity.
Earlier this year, the Labor Department issued a new “fiduciary rule” that will make it harder for millions of Americans to save for retirement by making it more costly for businesses to offer retirement savings plans to their employees.
Even though the Obama administration’s time is coming to a close, the regulatory spigot isn’t shutting off. According to the American Action Forum report, regulators could end up issuing at least 41 more major rules.
This will only make it harder for American companies. Back to Foster:
When the rules are issued they deter investment further because they raise costs, distort decisions, and block opportunities. These many rules further deter investment by adding to the psychology of the economy today – which suffers from a well-justified persecution complex, with Washington as lead persecutor.