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  • Red Tapeworm 2014: Tell Us -- Which Regulations Hurt Your Business as You Grow?

    August 12, 2014 11:59 AM

    This is Part 24 of a series taking a walk through some sections of Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State (2014 Edition)

    The number of federal regulations for which the Regulatory Flexibility Act requires a so-called “Regulatory Flexibility Analysis” to asses burdens on small business is on the upswing.

    The level under President Barack Obama is higher than that of his predecessor, despite the strategic reporting of fewer regulations in the semi-annual Unified Agenda of Federal Regulations

    Sustainble, robust economic health is not about artificial stimulation of favored industries while simultaneously overruling prices and plans in crucial sectors like telecommunications, energy and finance.

    Every intervention has been tried, and more are touted. For a change, political leaders should better appreciate the increase in regulation as firms grow, and seek to liberalize the economy rather than inflict ever more “management. We can cut regulations that impede wealth creation and job prospects.

    I’ve been interested in inventorying laws and regulations that impact a business as it grows. It’s a useful exercise on the road to rolling back excesses.

    Below is a rough inventory I’ve compiled, but, it does not address industry-specific rules, which are themselves desperately in need of reform and probably dominate in most sectors (also, the tally doesn't address that which will issue from new financial reform and Obamacare legislation).

    Such industry-specific information is all too rare: I came across a superb survey done by the National Automobile Dealers Association, polling their members on an array of costs. There’s one by the American Aviation Institute that’s less comprehensive but very useful.

    We need many more bottom-up assessments for the entrepreneurial community to send a collective outburst to Washington D.C. about addressing the federal regulatory burden.

  • Due Process Eroded by Bills like CASA That Let Agencies Keep Fines They Impose

    August 11, 2014 2:42 PM

    Due process is being eroded by recent bills that would authorize agencies to impose massive fines on regulated industries, and then keep those fines for themselves, giving them an incentive to find regulated entities guilty based on weak or equivocal evidence. To protect due process, such fines should be payable to the U.S. Treasury, not the prosecuting agency. 

    I write about one such bill at The Examiner:

    Disturbing provision harms due process in Campus Accountability and Safety Act

    It is a conflict of interest — and sometimes a violation of due process — for a fine to go to the very unit of government that employs the judge or official who imposed the fine. That gives the official an incentive to find the accused guilty in order to enrich the official’s agency. But such fines are apparently authorized by a provision of the Campus Accountability and Safety Act (CASA) (also known as S. 2692 and H.R. 5354).

  • CEI’s Battered Business Bureau: The Week in Regulation

    August 11, 2014 8:18 AM

    Despite another 47 proposed regulations and 80 final regulations last week, 2014 remains on pace to have the smallest number of new regulations of any year in either of the last two administrations.

  • The Case for Closing the Export-Import Bank

    August 8, 2014 11:34 AM

    Over at American Banker’s BankThink blog, I have a piece making the case for closing the Export-Import Bank, mostly on corruption grounds:

    The Wall Street Journal reported on June 23 that four Ex-Im employees have been removed or suspended in recent months, "amid investigations into allegations of gifts and kickbacks."

    Former Ex-Im employee Johnny Gutierrez allegedly accepted cash payments from an executive of a Florida-based construction equipment manufacturer that has received Ex-Im financing on multiple occasions. In a July 28 congressional hearing, Gutierrez chose to plead the Fifth Amendment rather than deny the allegations. The other cases involve two "allegations of improperly awarding contracts to help run the agency" and another employee who accepted gifts from an Ex-Im suitor.

    Read the whole thing here. There are, of course, many other reasons to close Ex-Im. I compiled some of them in a paper here.

  • Red Tapeworm 2014: Small Businesses Beaten Down by Recordbreaking Federal Regulations

    August 7, 2014 4:36 PM

    This is Part 23 of a series taking a walk through some sections of Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State (2014 Edition)

    The “Small Business Anthem,” heard on the Small Business Advocate syndicated radio program, goes in part:

    Even though you make payroll every Friday,

    you don’t have a guaranteed paycheck.

    You’re a small business owner, and you eat what you kill.

    Policy hairsplitters like to proclaim that small busnesses aren’t the main engines of new jobs, that it’s new businesses that do.

    Well, OK. Maybe, or maybe it’s different ways of saying the same thing. Regardless, upstarts and small firms take it on the chin when it comes to regulation. Neither can suck it up the way large companies do, especially when large companies seek out regulation, crony-style.

    Something called the Regulatory Flexibility Act directs federal agencies to assess their rules’ effects on small businesses. Further, as the Federal Register notes:

    The Regulatory Flexibility Act requires that agencies publish semiannual regulatory agendas in the Federal Register describing regulatory actions they are developing that may have a significant economic impact on a substantial number of small entities.

    The chart nearby shows the number of rules annually requiring a Regulatory Flexibility Analysis (RFA) since 2001. It also shows other rules anticipated by agencies to impact small business, but that happen to not require the RFA.

  • Uber and Regulation: Pro-Business Is Not Pro-Market

    August 7, 2014 4:30 PM

    “Republicans love Uber. Young urban voters love Uber. And Republicans hope that means young voters can learn to love the GOP.”

    That was the opening line of Byron Tau and Kevin Robillard’s piece for Politico after the Republican Party rolled out a pro-Uber petition/prospecting campaign. Notice I say “pro-Uber” rather than “pro-market” or “free market.” Here’s the GOP appeal in full:

    Our country was built on the entrepreneurial spirit. Our cities deserve innovative and effective solutions without government getting in the way. 

    That’s what innovative businesses like Uber provide. And that’s why our cities need Uber. 

    But across the country, taxi unions and liberal government bureaucrats are setting up roadblocks, issuing strangling regulations and implementing unnecessary red tape to block Uber from doing business in their cities. 

    We must stand up for our free market principles, entrepreneurial spirit and economic freedom. 

    Show your support for Uber by signing the petition today.

    Despite the appeal to “free market principles,” the petition fails to mention actual free market policies beyond letting Uber operate lawfully. Furthermore, the notion that “liberal government bureaucrats” are only now “setting up roadblocks, issuing strangling regulations and implementing unnecessary red tape” in the transportation services market ignores many decades of stifling, anti-consumer regulation from these bureaucrats.

    I am a huge fan of the services offered by Uber, Lyft, and others. I understand their political strategy; I’d probably do the same thing in their shoes. But it is important to remember that being pro-business is not the same as being pro-market. As I’ve noted several times in the past, it appears the current legislative and regulatory advocacy coming from incumbent ridesharing providers is one of accommodation, not deregulation. Most unfortunately, many in the free market policy world also appear to be adopting this outlook as their own.

    This is most likely unintentional, as the current ridesharing policy debate in the free market movement is dominated by technology policy analysts or generalists, rather than transportation policy wonks. What this means is that many appear to be ignorant of the years of work by transport economists supporting the broad deregulation of the transportation services sector. As a result, legislative and regulatory proposals that merely grant Uber et al. a carve-out from existing regulations while piling on new rules—all while doing little to reduce barriers to entry for future firms with potentially very different shared-use mobility business models—are gaining support from some quarters of the free market movement. In advocating broad liberalization of transportation services, political realities dictate that compromises will sometimes be needed—particularly in the short run. But to accept accommodations and new regulations of Uber et al. as a victory for the free market is to miss the forest for the trees.

  • Red Tapeworm 2014: Completed Economically Significant Rules at Record Levels

    August 6, 2014 3:13 PM

    This is Part 21 of a series taking a walk through some sections of Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State (2014 Edition)

    We’ve noted that there are 191 high-cost “economically significant” rules scattered among the 3,305 rules in the Unified Agenda of Federal Regulations. These represent a decrease from the year before, but they still carry on a level higher than what prevailed during the early part of the 2000s.

    Each economically significant rule has annual impact of at least $100 million, so those rules might be expected to impose annual costs of at least $19 billion when finally implemented (191 rules multiplied by the $100 million economically significance threshold). A full list of these 191 rules may be seen in Appendix: Historical Tables, Part G in Ten Thousand Commandments.

    The $19 billion likely represents a floor, although economically significant rules can sometimes reduce costs. Moreover, it each represent not a one-time cost, but a recurring annual cost to be added to prior years’ costs cumulatively. Nor are agencies legally limited to the regulations they list in the Agenda.

    The chart nearby isolates the totals of Completed” economically significant rules from 2013’s spring and fall Agendas for closer analysis.

    One can see that total Completed economically significant rules annually are down substantially in 2013 from the 2010 peak—from 81 to 51. (The 2014 Spring Agenda has brought another 38.)

  • Public Still Favors Transportation User Fees over Tax Increases

    August 6, 2014 2:29 PM

    Voters in Missouri yesterday rejected a proposed constitutional amendment that would have imposed a 0.75 percent sales tax to fund transportation, with nearly 60 percent opposing a plan that would have increased annual state road funding by approximately $500 million. User fee advocates and progressive activists strongly opposed the measure, arguing that it was less efficient than direct and indirect user charges, and unfair for low-income urban residents to pay for the road use of wealthier households and businesses. These concerns have merit and supporters of sound transportation policy should applaud Missouri's voters.

    Yesterday also saw the release of new polling data from GfK and the Associated Press on questions related to transportation funding. While it has been noted that the public appears skeptical of the options presented (raise federal fuel excise tax rates, enter into public-private partnerships, devolve federal responsibility to the states, expand tolling), opposition to gas tax increases was the greatest, with 58 percent of respondents saying no. The full results are below:

    Here are some ways to pay for transportation projects, such as highway construction, improvements to roads and bridges, and maintenance of public roads. For each, please indicate if you support, oppose or neither support nor oppose it as a way to fund such projects. 

     

      Support Neither support 
    nor oppose
    Oppose Refused/
    Not answered
    1) Raise federal gasoline taxes from their current levels 
    of 18.4 cents per gallon of gasoline and 24.4 cents 
    per gallon of diesel fuel
    14 26 58 2
    2) Have private companies pay for construction of new 
    roads and bridges in exchange for the right to charge 
    tolls
    17 35 46 2
    3) Turn the responsibility for paying for such projects 
    over to state and local governments
    30 46 22 3
    4) Replace federal gas and diesel taxes with taxes 
    based on how many miles a vehicle is driven
    20 37 40 3

    In addition, after being told by pollsters that 20 percent of driver tax revenue is currently diverted to mass transit, only about a quarter of respondents supported increasing transit's share of road user revenue.

  • The Let Me Google That for You Act

    August 5, 2014 3:22 PM

    When it comes to government transparency, more is better. As a general principle, the government should make public as many of its documents as possible (a principle CEI is currently litigating for against a number of agencies). Despite transparency shortcomings elsewhere, a bright spot since 1950 has been the Commerce Department’s National Technical Information Service (NTIS).  The NTIS collects a slew of scientific and technical government documents from a variety of agencies, and offers them for sale to the public. But a new bill from Sens. Tom Coburn (R-Ok.) and Claire McCaskill (D-Mo.) would eliminate the NTIS altogether.

    Why would Senators as outspoken on transparency issues as Coburn and McCaskill favor eliminating an agency that does nothing but increase transparency? Because for some years now, the NTIS has unofficially been part of the federal government’s Department of Redundancy Department. As National Journal notes, “the Government Accountability Office has asked NTIS to stop selling its reports, as that agency posts them on its own site for free.”

    Coburn and McCaskill’s bill, the Let Me Google That For You Act, makes that point in its very name. The NTIS doesn’t just charge people for documents that can be found for free with a simple Google search. It also has a staff of 150 and a $66 million budget, which modern technology has rendered completely wasteful.

  • Red Tapeworm 2014: Big Dollar Federal Regulations in the Pipeline Highest under Obama

    August 4, 2014 12:21 PM

    This is Part 21 of a series taking a walk through some sections of Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State (2014 Edition)

    There were 3,305 rules in the Unified Agenda of Federal Regulations at year-end 2013. It’s the place where federal regulatory agencies outline their upcoming priorities. Agencies regularly finalize over 3,500 rules each year.

    A subset of these rules is classified as “economically significant,” meaning (usually) that agencies anticipate yearly economic impacts of at least $100 million. Those impacts generally amount to increased costs, although occasionally an economically significant rule is intended to reduce burdens on the public.

    At year-end 2013, economically significant rules from 26 separate departments and agencies appeared at the active (prerule, proposed rule, and final rule), completed, and long-term stages (See Table 6 in Ten Thousand Commandments for the breakdown by agency).

    We’ve noted before that the overall number of rules in the Unified Agenda is down, and we discussed why, including reasons that involve political delays.

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