Red ink on the rise

Obama still drown­ing busi­ness in ocean of rules

The Washington Times Daily - - Opinion - By Ed Feulner Re­viewed by Peter Han­naford

When it comes to reg­u­la­tions, Pres­i­dent Obama’s mes­sage to his con­ser­va­tive crit­ics seems to be: Mes­sage re­ceived. Early last year, he vowed to crack down on overzeal­ous rule-mak­ing, not­ing that the “rules have got­ten out of bal­ance” and “have had a chill­ing ef­fect on growth and jobs.” He’s right — they have.

But ac­tions speak louder than words, don’t they? Re­gard­less of how tough the pres­i­dent may talk on reg­u­la­tion, his ad­min­is­tra­tion has en­acted far more ma­jor reg­u­la­tions — and sig­nif­i­cantly more ex­pen­sive ones — over the first three years of his pres­i­dency than the Ge­orge W. Bush ad­min­is­tra­tion en­acted dur­ing its first three years.

This runs counter to what we’ve heard from the pres­i­dent’s apol­o­gists. Over the past sev­eral months, they’ve been brag­ging about his rule-mak­ing record. As the pres­i­dent him­self said dur­ing his most re­cent State of the Union ad­dress: “I’ve ap­proved fewer reg­u­la­tions in the first three years of my pres­i­dency than my Re­pub­li­can pre­de­ces­sor did in his.”

But a new re­port from the Her­itage Foun­da­tion, “Red Tape Ris­ing,” shows just the op­po­site is true. This ad­min­is­tra­tion has been on a rule-mak­ing tear.

Specif­i­cally, dur­ing the three years of the Obama ad­min­is­tra­tion, 106 new ma­jor reg­u­la­tions have been im­posed at a price tag of more than $46 bil­lion an­nu­ally — and that’s on top of nearly $11 bil­lion in one-time im­ple­men­ta­tion costs.

How does this com­pare to the num­ber of ma­jor reg­u­la­tions that were im­posed un­der Pres­i­dent Bush? It’s al­most four times higher. And the cost? About five times higher. Some­thing’s “got­ten out of bal­ance,” all right. With so many rules be­ing laid on the backs of busi­nesses both large and small, is it any sur­prise that job cre­ation has been so slow for much of the lat­est eco­nomic re­cov­ery?

In De­cem­ber, the Na­tional Fed­er­a­tion of In­de­pen­dent Busi­ness asked small-busi­ness own­ers to name their sin­gle big­gest prob­lem. The No. 1 choice, named by 19 per­cent of those who re­sponded, was “reg­u­la­tions and red tape.” It came in ahead of “poor sales” (though it’s easy to see how all these new rules de­press sales). That’s up from 15 per­cent a year ago. Clearly, the reg­u­la­tory bur­den is get­ting heav­ier.

You can be sure that the weight of that bur­den is be­ing shared. The costs of these reg­u­la­tions are passed on to con­sumers in the form of higher prices and limited prod­uct choices. Take the price con­trols that bu­reau­crats slapped last year on the fees that banks may charge to process debit-card trans­ac­tions. They prompted banks to can­cel many re­wards pro­grams and free ser­vices. They also led to higher fees on check­ing ac­counts and credit cards.

Hardly an area of our lives goes un­touched by reg­u­la­tion. The new rules for last year alone cover many con­sumer items, in­clud­ing re­frig­er­a­tors, freez­ers, clothes dry­ers, air con­di­tion­ers and en­ergy stan­dards for flu­o­res­cent lights. There were new test­ing and la­bel­ing re­quire­ments for toys, lim­its on au­to­mo­tive emis­sions of “green­house gases,” re­quire­ments for post­ing fed­eral la­bor rules and more ex­plicit warn­ings for cig­a­rette pack­ages. The list goes on.

The main trou­ble­maker? The 2010 Dodd-frank fi­nan­cial reg­u­la­tion law. It alone is re­spon­si­ble for 12 ma­jor rules — so far, that is. Hun­dreds more Dodd-frank rules re­main to be writ­ten. Then there are the rules still to come from Oba­macare and the En­vi­ron­men­tal Pro­tec­tion Agency’s global-warm­ing cru­sade.

That’s why it’s cru­cial for Congress to take some com­mon-sense steps now. It can start by re­quir­ing con­gres­sional ap­proval of any new ma­jor reg­u­la­tions that agen­cies pro­mul­gate. An­other why-haven’t-they-thought-of-it­sooner so­lu­tion: re­quir­ing that all ma­jor reg­u­la­tions have an ex­pi­ra­tion (sunset) date.

“This reg­u­la­tory tide is not ex­pected to ebb any­time soon,” warns “Red Tape Ris­ing.” Let’s act now — be­fore we’re all un­der water.

While this book’s sub­ti­tle is overly ex­pan­sive, no one can deny that Ron­ald Rea­gan’s vic­tory in the 1976 Texas Re­pub­li­can pri­mary saved his pres­i­den­tial nom­i­na­tion cam­paign and opened the way for the Re­pub­li­can Party to dom­i­nate pol­i­tics in the Lone Star state.

It was a re­mark­able elec­tion in many ways. By that time, Tex­ans had be­come used to con­sid­er­ing Re­pub­li­can pres­i­den­tial can­di­dates, but they still voted solidly Demo­cratic for state of­fices and leg­is­la­tors.

If it hadn’t been for one Demo­crat, there might never have been a Texas pres­i­den­tial pri­mary in 1976, and Ron­ald Rea­gan might have faded into his­tory. That year, one-term Sen. Lloyd Bentsen wanted to run for pres­i­dent. His key sup­port­ers had com­mis­sioned a poll that had found 67 per­cent of Tex­ans liked the idea of a pres­i­den­tial pri­mary in 1976. Bentsen con­sulted with Demo­cratic leg­is­la­tors, sug­gest­ing they pass leg­is­la­tion the next year for such a pri­mary.

They passed a bill that was tai­lor-made to help Bentsen. It even al­lowed him to run for re-elec­tion to his Se­nate seat while run­ning for pres­i­dent. Early dis­ap­point­ments in the pres­i­den­tial sweep­stakes, how­ever, per­suaded Bentsen to scale back his can­di­dacy in the pri­mary to that of “fa­vorite son.” He was a bland cam­paigner, and Jimmy Carter was be­gin­ning to gob­ble up del­e­gates else­where. By Elec­tion Day, many con­ser­va­tive Democrats had crossed over to vote Re­pub­li­can — for Ron­ald Rea­gan.

Un­til that time, the Re­pub­li­can Party in Texas was run by a small, clubby “es­tab­lish­ment” headed by its one ma­jor elected of­fi­cial, Sen. John Tower. They were solidly be­hind Pres­i­dent Ford for the nom­i­na­tion.

A few Tex­ans had other ideas. Ray Barn­hart, de­scribed by the au­thor as “a brash, can­tan­ker­ous 48year-old en­tre­pre­neur” and Ernest An­gelo, the soft­spo­ken mayor of Mid­land, be­came the lead­ers of the Rea­gan move­ment in the state. Re­cruited as co-chair­men were ac­tivist Bar­bara Staff and Jimmy Lyon, head of an in­de­pen­dent bank. They were con­vinced that the stars and plan­ets were aligned for a Rea­gan vic­tory, given pent-up con­ser­va­tive dis­sat­is­fac­tion with the Re­pub­li­can es­tab­lish­ment and con­ser­va­tive Demo­cratic dis­sat­is­fac­tion with Bentsen.

This dove­tailed with a ma­jor change in Rea­gan’s strat­egy. He and his staff ar­rived in Racine, Wis., late on Mon­day, March 22. By then, he had lost New Hamp­shire, Florida and Illi­nois. North Carolina, from which we had just come, did not look promis­ing.

Cam­paign man­ager John Sears put forth a bold plan: Stop cam­paign­ing in Wis­con­sin, go back to Cal­i­for­nia, raise money for a half-hour na­tion­ally tele­vised speech, then work on the May pri­maries, which would fa­vor Rea­gan — be­gin­ning with Texas on May 1. This is what hap­pened. Jimmy Lyon, the loyal con­ser­va­tive banker, lent the cam­paign the money. Rea­gan’s speech was broad­cast on NBC and raised well over $1.25 mil­lion.

Back on the ground in Texas, Mr. Barn­hart and Mr. An­gelo were build­ing a grass-roots net­work of Rea­gan sup­port­ers, in­tent on sup­plant­ing the ev­er­cau­tious es­tab­lish­ment with en­er­getic con­ser­va­tives. Au­thor Gil­bert Gar­cia brings out the drama in the race and gives us lively, col­or­ful por­traits of play­ers — Mr. Barn­hart, Mr. An­gelo, Ron Paul (the only Texan mem­ber of Congress to en­dorse Rea­gan), cur­rent Texas Gov. Rick Perry and Tower, among oth­ers.

Rea­gan won all 100 Texas del­e­gates in the pri­mary. Mr. Gar­cia says, “With­out Rea­gan’s 1976 blowout, the Amer­i­can con­ser­va­tive move­ment would have lacked a cat­a­lyst, a uni­fy­ing force.” From it, Texas has be­come a Re­pub­li­can state with clear ma­jori­ties in both leg­isla­tive cham­bers as well as statewide elected of­fices.

The au­thor also thinks this grass-roots takeover of the Texas Re­pub­li­can Party 36 years ago was the tem­plate for the suc­cess­ful de­vel­op­ment of the Tea Party move­ment.

There are some er­rors in the book, but none is ma­jor. The au­thor says that when Rea­gan first cam­paigned in Texas he was mak­ing “for­eign pol­icy and Amer­ica’s mil­i­tary strength the fo­cus of the cam­paign.” He calls this a new theme. It wasn’t. It had been field-tested be­gin­ning with Rea­gan’s ar­rival in Florida on March 5. From that day for­ward, there was a daily in­sert of new specifics on these twin is­sues in his stump speech. By the time he first cam­paigned in Texas, they had be­come the dom­i­nant themes.

One small cor­rec­tion: Mr. Gar­cia iden­ti­fies Deaver & Han­naford Inc. as a law firm. It was a public af­fairs/public re­la­tions firm, the one that man­aged Rea­gan’s public pro­gram af­ter he left the gov­er­nor­ship and in whose suite he had his own of­fice for five years.

De­spite these glitches, “Rea­gan’s Come­back” is an ab­sorb­ing read for any­one in­ter­ested gen­er­ally in pol­i­tics and par­tic­u­larly in the el­e­ments of Ron­ald Rea­gan’s suc­cess.


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