The New Obama Regulations Headed for U.S. Business in 2013

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.

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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.

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