Business owners complain regulations are killing jobs

From rules on greenhouse gas emissions to labor agreements for construction projects, business owners and industry advocates testified on Thursday that federal agencies had imposed unworkable and excessive regulations that are eliminating American jobs and driving work overseas.

During a House Oversight and Government Reform Committee hearing, business representatives bemoaned a host of regulations the Obama administration had imposed during the past two years. Some witnesses criticized labor rules they claimed prevent companies from bidding on federal contracts. Others blasted the paperwork burdens associated with the new health care law.

But, no matter the rule in question, the complaints echoed a similar refrain -- the cost and time associated with complying with federal regulations were strangling the private sector.

"If regulatory burden continues to grow we, along with all other private sector companies, will no longer be able to compete in the world market," said Michael Fredrich, president of MCM Composites, a small Wisconsin business. "Jobs will not be created and new businesses will not be formed. You will suffocate the system that has produced everything we enjoy today. It is that simple."

Jack Buschur, president of Buschur Electric, a contracting business in Minster, Ohio, with 18 employees, said project labor agreements, which require employees to receive union-approved wages and benefits even if they do not belong to a union, were harming the already wounded construction industry.

"When you consider the fact that the construction industry currently has an unemployment rate of over 20 percent, it makes no sense to impose PLAs or other regulations that serve as impediments to job creation," he said. Buschur testified that he spends roughly 20 percent of his time dealing with federal regulations.

In the weeks leading up to the hearing, the committee's chairman, Rep. Darrell Issa, R-Calif., sent letters to 150 business associations, think tanks and industry lobbying firms requesting recommendations for regulations that deserved sharper scrutiny or potentially repeal.

Earlier this week the oversight committee released nearly 2,000 pages of responses, running the gamut from fish and wildlife rules to industrial emission standards. Issa's staff analyzed and summarized the complaints in a 97-page report released on Thursday.

The hearing comes a month after President Obama ordered a governmentwide review of existing federal regulations and a more stringent examination of future rule-making. Many of the witnesses supported the order as a healthy first step, but noted that it will be up to agencies to comply with the directive.

While witnesses in two panels railed against a range of federal agencies, the Environmental Protection Agency received the most scorn, for rules regulating greenhouse gas emissions, electrical power generators and industrial boilers.

"The current state of EPA rule-making will increase the financial burden on businesses and as we all know, limited resources translates into fewer jobs and higher prices for consumers," said Harry Alford, chief executive officer of the Black Chamber of Commerce.

James Gattuso, senior research fellow in regulatory policy at the Heritage Foundation, cited one recent estimate that the new financial reform law would require 243 new formal rule-makings by 11 different agencies. In total, regulatory agencies have 183 more rules in the pipeline than they did one year prior, he said.

Gattuso said major regulations that place new burdens on the private sector should be subject to congressional approval. Regulations, he said, also should automatically expire if not reaffirmed.

"Ultimately, regulatory burdens will rise until policymakers fully appreciate the burdens that regulations impose on Americans, and exercise the political will necessary to limit and reduce those burdens," he said.

But, others said the claims from industry that regulations were the source of high unemployment were vastly overstated. "That's just not the case," said Sidney Shapiro, vice president of the nonprofit Center for Progressive Reform. "And, the evidence to back up those claims is just not there."

As the hearing extended into the early afternoon, a clear partisan breakdown began to appear. Committee Democrats repeatedly claimed businesses and GOP lawmakers were ignoring the health and safety improvements associated with regulations. Republicans, meanwhile, charged Democrats and the administration with pushing through policy changes that fail to support job growth.

Issa said it was not his intention to "do away" with federal regulations. Quoting former President Ronald Reagan, he said government "can and must provide opportunity, not smother it."

But, the committee's ranking member, Rep. Elijah Cumming, D-Md., said the hearing failed to focus on the benefits associated with regulations. "We need to base our conclusions on fact, rather than rhetoric," he said.

Jay Timmons, president and chief executive officer of the National Association of Manufacturers, however, put the argument into dire terms. "The cumulative burden of these new and costly regulations is nearing a tipping point," Timmons said. "The 112th Congress has the ability to recognize the dangerous course we are on and to change it before it is too late for our economy and the American worker."