The Regulatory Cliff Is Nearly as Steep as the Fiscal One

Americans are learning more about the "fiscal cliff" approaching at the beginning of next year, when tax rates for families and small businesses are set to spike and new taxes in President Obama's health-care spending law take effect. But unless there's real change in Washington, we're also headed for a steep "regulatory cliff" that could compound the damage. After three years of bureaucratic excess, the Obama administration has been quietly postponing several multibillion-dollar regulations until after the November election. 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. Then there is the mega-rule on the shelf at the Environment Protection Agency (EPA) that could block business expansion in many areas of the country. Proposed in 2010, the Ozone Rule would impose a limit on ozone (which creates haze from emissions from cars, power plants and factories) so strict that up to 85% of U.S. counties monitored by the EPA would be in violation. Susan Dudley, a regulatory economist at George Washington University who served in the previous administration, notes that this rule would force many communities "to forego productive investment and hiring decisions in order to spend hundreds of billions of dollars per year in vain attempts to meet unachievable standards." The EPA itself says the rule could impose up to $90 billion in yearly costs on manufacturers and other employers. Last September, after months of public outcry, the White House instructed the EPA to put the rule on ice until 2013, when it will be "revisited." Also on the Obama EPA's to-do list for 2013 is a new rule that its regulators admit could increase costs for energy consumers and others by as much as $4.5 billion per year, depending on how it's implemented. The rule targets equipment that power plants and manufacturing facilities use to draw in water to prevent overheating, even though those intake systems are not harmful to human health or water quality. Last year the EPA estimated that this new rule would cost $1 for every three cents in benefits. More recently, the EPA has proposed the use of public-opinion surveys with hypothetical scenarios that boost the alleged benefits of its proposed regulation by nearly 14,000%. This is another example of a major regulation put off until next year, ensuring that Americans won't learn about its effect on their electricity bills until after the election...more