Statement of Judiciary Committee Chairman Lamar Smith Full Committee Markup of H.R. 4078, “Regulatory Freeze for Jobs Act of 2012”

Statement of Judiciary Committee Chairman Lamar Smith
Full Committee Markup of
H.R. 4078, “Regulatory Freeze for Jobs Act of 2012”

Chairman Smith: The Obama administration has quickly turned the United States into a regulation nation.  This administration has adopted an unprecedented amount of costly new regulations, which hinder small business growth and stall job creation.

In his most recent State of the Union Address, President Obama claimed to have “approved fewer regulations” than President Bush did in his first three years in office. 

But, according to a new study by the Heritage Foundation, President Obama has adopted 106 major rules that impose $46 billion in additional annual regulatory costs on the private sector. 

By contrast, in his first three years in office President Bush adopted 28 such major regulations with $8 billion in additional annual costs.  That is about a fourth of the number of major regulations the Obama Administration imposed on the private sector in a similar period—at a fifth of the cost.  We need to encourage small businesses to expand, not tie them up with red tape. 

In 2011, more than one-third of these major rules were made to implement Dodd-Frank, an overreaching law that over regulates the financial services sector.  The most expensive were from the Environmental Protection Agency, which issued five major regulations that cost more than $4 billion annually

The number of economically significant regulations also has increased.  Under President Bush, the Office of Information and Regulatory Affairs’ (OIRA) bi-annual regulatory agenda contained an average of 77 economically significant regulations in the proposed and final stages; the bi-annual average under President Obama is 124.

The threat of even more regulations discourages investment and economic growth.  In 2011, the Obama Administration’s agenda had over 200 “economically significant” new rules, each of which typically affect the American economy $100 million or more each year.

The President repeatedly harps on job creation, but he can’t have it both ways. He cannot continue to impose excessive regulations on small businesses and still expect new jobs and economic growth. It’s one or the other.

This is why we need Mr. Griffin’s bill, H.R. 4078, the Regulatory Freeze for Jobs Act.  The Freeze Act gives small businesses a much-needed break from new significant federal regulations until the unemployment rate stabilizes at six percent. 

Over-regulation hinders job creation and hampers economic recovery, as Professors Allan Meltzer of Carnegie Mellon University and John Taylor of Stanford University explained to the Subcommittee on Courts, Commercial and Administrative Law last month.

Fortunately, you don’t need a Ph.D. in Economics to understand this.  A recent Gallup Poll found that among the 85% of U.S. small business owners who aren’t hiring, nearly half of these cited being “worried about new government regulations” as the reason they are not hiring. 

And 63% of respondents to a poll conducted by the National Federation of Independent Businesses said “rules issued over the last 5 years have done more to hurt than to help small businesses.”

Even President Obama recognizes that overregulation kills jobs.  In a January 2011 Wall Street Journal op-ed, the President acknowledged that overregulation has “stifled innovation” and has had “a chilling effect on growth and jobs.”

The Freeze Act is narrowly tailored only to stop unnecessary regulations.  The bill contains reasonable exceptions for significant regulations that are necessary to protect health and safety, for national security, to enforce criminal laws or to implement trade agreements.

According to a study by the Small Business Administration, regulations cost the American economy $1.75 trillion annually.  Unfortunately, rather than add much-needed jobs to the economy, the Obama Administration has only added job-killing regulations that burden businesses and stifle economic growth.

The Freeze Act encourages job creators to make the kinds of investments that will jump-start our economy and gives them confidence about future regulatory actions.  We need to lift the burden on small businesses and free them up to spend more, invest more, and produce more in order to create more jobs for American workers.