Start the conversation
Comment on This Story
Or to contact Money Morning Customer Service, click here.
Agencies under U.S. President Barack Obama will add thousands of new regulations to U.S. business in 2013, with many of them extremely costly.
According to Small Businesses for Sensible Regulations, an arm of the nonprofit, nonpartisan National Federation of Independent Business (NFIB), more than 4,100 new Obama regulations are in the pipeline.
The group estimates that the 13 most expensive regulations will cost the U.S. economy $515 billion.
Held back during the heat of the presidential campaign, a backlog of these Obama regulations is about to hit the economy full force.
"The Obama administration has been quietly postponing several multibillion-dollar regulations until after the November election," wrote Sen. Rob Portman, R-OH, in an August Wall Street Journal guest column. "Those delayed rules, together with more than 130 unfinished mandates under the 2010 Dodd-Frank financial law, could significantly increase the regulatory drag on our economy in 2013."
Portman dubbed the situation "the regulatory cliff," a reference to the widely discussed fiscal cliff.
"Economically Significant' 2013 Obama Regulations
While the sheer number of regulations can cause compliance problems, one category - dubbed by the government as "economically significant" - impose the greatest costs on the U.S. economy.
Economically significant regulations are those that cost $100 million or more, by the government's definition.
In his first three years, the Obama administration created 953 such regulations, compared to 30 in the comparable period for President George W. Bush, according to CEI.
Of the 4,128 Obama regulations in the pipeline, 212 fall into the economically significant category. That's 32.5% more than the 160 issued in 2006 under President Bush.
The Republican-controlled House of Representatives has tried in vain to curb the wave of Obama regulations by passing three dozen bills, none of which has made it to the floor of the Democrat-controlled Senate.
Now the re-election of President Obama, and the addition of two seats to the Democratic majority in the Senate, virtually guarantees a mountain of new regulations over the next several years.
Many of these heavyweight Obama regulations will hit these three industries particularly hard in 2013:
- Energy: Many of President Obama's toughest new regulations are expected from the Environmental Protection Agency (EPA), which has 21 economically significant rules in the pipeline. Just one such regulation due for 2013, the Ozone Rule, would cover emissions from cars, power plant and factories, and by the EPA's own estimates would cost $90 billion annually to implement.
- Healthcare: Although the Affordable Care Act has been law for two years, many of its working parts - the regulations - either are not yet in force or, in some cases, not yet written. So far there are 13,000 pages of Obamacare rules which will govern virtually every aspect of health care in America. The Department of Health and Human Services, which carries most of the responsibility for administering Obamacare, has 65 economically significant regulations in the pipeline.
- Financial: The sting of the 2008 financial crisis has led to massive new Obama regulations. The Dodd-Frank law, like Obamacare, calls for many new rules that still have yet to be written -- about a quarter of its 400 regulations. The eventual cost of the crackdown to America's eight largest banks, according to a study by Standard & Poor's, will be $34 billion. But the real damage may be to small banks, many of which could disappear.
New Obama Regulations Hit Small Business
The fact is, the U.S. economy doesn't need any more self-inflicted wounds from the government right now.
The government already has saddled the economy with the $16 trillion federal debt as well as the fiscal cliff.
Given that, piling on more burdensome regulations hardly seems like a good idea.
According to the Competitive Enterprise Institute, existing regulations already cost the U.S. economy $1.8 trillion annually.
CEI estimates that government regulations cost U.S. companies an average of $8,086 per employee each year, but small businesses, which account for about half of all hiring, proportionally get hit harder.
CEI says regulations cost companies with fewer than 20 employees $10,585 per employee.
A survey of small business owners conducted by The Hartford insurance company in August showed that 56% considered uncertainty over government regulations a major risk to their business.
Granted, not all regulation is bad -- the largely successful efforts of the Food and Drug Administration to maintain a healthy food supply, for example.
But excessive regulation increases compliance costs (hours of additional paperwork, new equipment, etc.) for many businesses, especially small businesses, which damages profits and discourages hiring.
The paperwork alone can be a significant hardship on small businesses. White House data shows that Dodd-Frank and the Affordable Care Act (Obamacare) already have increased the total hours of federal paperwork from 8.8 billion hours in 2010 to 10.38 billion hours - enough work to keep 772,000 employees busy for a full year.
Look for the new Obama regulations to start rolling out in the New Year.
Related Articles and News:
- Money Morning:
U.S. Economy 2012: Jack Welch on What's Stifling Job Creation - Money Morning:
Oil and Gas Companies: What this EPA Official Doesn't Understand - Money Morning:
Five Things Obama Didn't Want You to Hear in His State of the Union - The Hartford:
Small Business Success Study - American Action Forum:
President Obama's $488 Billion Regulatory Burden - National Review:
The "Regulatory Cliff' - Competitive Enterprise Institute:
10,000 Commandments - Small Business For Sensible Regulations:
Regulatory Tidal Wave: $515 Billion
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.
Do you have a list of the regulations??
There are far too many regulations to list here, but the government provides a Website that posts all new and pending regulations: http://www.regulations.gov/#!home;tab=search
How about a top ten list? Just posting an article without even one specific is a little lame
Isn't it your responsibility to look up these massive regulations?
I thought Obama was going to have hundreds of millions of regulations in 2013. Yeah regulations against banks was never done after 1929 crash right??? Like Glass-Steagall, which was dissolved in 1999 after LTC crashed and now caused the 2008 crash, but please keep whining about banks having toooo much regulations. Or are you one of those people, like GOP banking committee members that state "banking is too complicated for me to understand, so please tell me what we can do to help you" (DeMint). Yes lets let banks develop fantasy securities that they sell to "customers", then bet against them. Regulations ARE CREATED AFTER THE "FREE MARKET" creates a national catastrophy or workers are killed. Now that corporations are "people", lets prosecute them for murder, like Walmart killed workers overseas. Lets let gun owners buy rocket propelled grenades to protect themselves from a fantasy demon.
Patrick-
1) Take a deep breath – you're quite clearly hysterical
2) Take off your "libbie blinders" and live in the real world
"Regulations are created after the 'free market' creates a national catastrophy or workers are killed."
Really, Patrick? So those scores of thousands of pages of the CFR were all responses to "national catastrophies and/or worker deaths?"
Get a grip on yourself. Just admit that you're a hard-left libbie that sees government as the "answer" to everything. After all, who among us lacks confidence in the folks who brought us the USPS, the DMV, who passed AMT without indexing it for inflation, and, pathetically, the Harry Reid-led Senate, which has simply declined to obey the law and pass a budget for nearly four years?
You surely don't lack confidence in these things – since you "KNOW" that all of this was done in response to national catastrophies and/or worker deaths.
BTW – since the ObozoCare bill, rammed through using a legislative trick, late at night, during the holidays, on a straight party-line vote by libbies like you, runs to 2,700 pages, is there any chance that some of its many tax increases and other job-killing rules were NOT in response to "national catastrophies and/or worker deaths?"
Just askin' – but I already know your answer: each and every one of those 2,700 pages saved the entire nation – perhaps even the entirety of Western Civilization – from nearly certain calamity.
Sad to be a clueless, blinded-by-ideology liberal. Sad.
spoken like a true communist
Patrick
"Fantasy Demons" tell that to the Germans and Jews in 1931.
Before a people can be conquered, they need to be disarmed.
You need help son.
Fantasy Demons? Ahhh, Pat, such a perfect useful idiot. You would have made a great pet monkey for Marx, or Lenin, or Stalin – no, Stalin would never have suffered such a dim-witted pussy.
Hey Pat, when you thnk of heavy handed srtrong arm governments who do you think of – the Soviet Union? – that worked out well; Communist Red China? – a decent economic model if you do not mind being told how many children you can have, and you do not mind wearing the exact same clothes as everyone else, or you do not mind being persecurted for your religious beliefs, or any other beliefs that are not purely party line; Nazi Germany? – again, strong economice model, but a little unfortunate in the whle genocide area – which was greatly facilitated once the gun ban took hold.
You are a simple minded putz. Good luck with your high tax, heavy regulation president. Golfing and surfing five days before the "financial crisis/cliff" – now there is a work ethic everyone can get behind.
Somewhere there is village missing Pat, and they want their idiot back.
Patrick, I really don't know what else to say. The comments by Mike, Huey and others sum up my opinion of people like you perfectly. Every breath you take is a waste of valuable natural resources. But perhaps people like you need these all-encompassing, overbearing regulations because you have absolutely no sense of personal responsibility or moral integrity, traits that our Founding Fathers believed in and pledged their very lives to protect. I would suggest that since you HATE the United States so much, go where every aspect of your worthless life is regulated. I hear Iran's nice this time of year!