Washington, D.C., September 14, 2011—Hours before President Obama’s address to Congress last week, scholars from the Competitive Enterprise Institute presented a “Ten-Point Plan to Create Jobs.” In a news release after the speech, CEI scholars called their plan “an alternative to the President’s expensive proposal.”
But despite still believing that the President’s spending initiatives are expensive and unnecessary, financial policy analysts at CEI are pleasantly surprised that the administration has now implied that it shares the goal of at least one plank of CEI initiatives – scaling back the costly accounting mandates of the Bush era Sarbanes-Oxley “financial reform.”
In his address, Obama declared, “We’re also planning to cut away the red tape that prevents too many rapidly growing start-up companies from raising capital and going public.” The next day, Bloomberg reported that “the administration will work with the Securities and Exchange Commission to review rules, including those put in place by the Sarbanes-Oxley Act passed in 2002 to impose stricter accounting rules.”
In an op-ed today on RealClearMarkets.com, CEI Director of the Center for Investors and Entrepreneurs John Berlau praises the President for putting “this specific burden to economic recovery back on the policy table.” But he urges both Obama and Congress to go beyond mere review and start repealing the most costly parts of the law. Noting that an April SEC study shows that annual costs of Sarbox’s “internal control” mandates can still reach almost 80 percent of a small-cap company’s total assets, Berlau argues that “repealing or scaling back this law could do more for jobs growth than the entire American Jobs Act.”
Berlau adds that “politically, if Obama wanted to scale back or repeal a big regulation, this would be an excellent candidate. The law was signed by George W. Bush, and Republicans foolishly never took the opportunity to relax or repeal it when they were in power. Thus, Obama does not have to go back on legislation he supported and can even triangulate to the ‘right’ of the Bush administration.”
Read John Berlau’s full RealClearMarkets.com op-ed here.