The Regulatory Freeze Act: Legislation to Make the World More Dangerous and the Economy Weaker
The so-called Regulatory Freeze for Jobs Act, reported out of the House Judiciary Committee earlier today, is the clearest example yet of just how broken the national debate on public protections has become. This bill is ostensibly about getting Americans back to work, but the bill contains no provisions to address unemployment. Instead, it would gut the system of public protections that underpins our entire economy.
The Regulatory Freeze Act (H.R. 4078) would impose a moratorium on all "significant regulatory actions" until the national unemployment rate falls below six percent. With very few exceptions, the moratorium would forbid any steps toward issuing any rule (or updating a current one) expected to have an economic impact of $100 million or more. However, rules may be repealed or rescinded regardless of their economic impact.
This legislation is breathtakingly bold – and breathtakingly bad. With passage of the REINS Act, Regulatory Accountability Act, and Regulatory Flexibility Improvements Act in December 2011, the House declared its intention to rewrite the regulatory process to promote special interest influence and to delay and weaken safeguards that people rely on every day. The Regulatory Freeze Act would go even further by shutting down the regulatory system entirely. Economists predict that it will be at least five years before the national unemployment rate falls below six percent: under Regulatory Freeze, it could be half a decade until limits on air and water pollution, standards for food and drug safety, and even restrictions on Wall Street to prevent the next financial crisis could take effect.
The Regulatory Freeze Act is premised on a false assertion that has been debunked by all available evidence. A survey of the economic research on the relationship between regulations and employment found that regulations have a positive effect on employment or make no difference. Business economists say that the current regulatory environment is "good" for business. Surveys by the American Sustainable Business Council, Main Street Alliance, Small Business Majority and McClatchy/Tribune News Service show that small business owners do not feel regulation is their most pressing problem. In fact, even surveys by the U.S. Chamber of Commerce and the National Federation of Independent Business – who themselves are vehemently against regulation – find that small businesses rank "economic uncertainty" and "poor sales," respectively, as their most important concerns. The proportion of small businesses citing regulations as the single most important problem they face is lower than it was during the Clinton administration, a time of rapid growth in employment.
Health, safety, environmental, financial, and other regulatory protections make our country stronger and safer for everyone. The Regulatory Freeze Act would impede any number of crucial safeguards that allow Americans to trust in the products they find at our retailers, the jobs being offered by our employers, and the infrastructure and environment that constantly surround us. It would undermine standards and safeguards that industry, as well as the public, support.
For example, the Regulatory Freeze Act would block implementation of the Food Safety and Modernization Act. This law was passed with support from both industry and consumer groups and should improve the safety of eggs, dairy, seafood, fruits, vegetables, and many processed and imported foods – but its effective implementation depends on rulemaking. The Food and Drug Administration has proposed a series of implementing rules that establish food safety programs and standards. The outbreak of Listeria in cantaloupe and concerns over "pink slime" in school lunches, among other incidents, demonstrate the importance of these rules. Delaying them could also have a significant, harmful economic impact on the agriculture and food industries, including job creation and preservation.
The Regulatory Freeze Act is the wrong legislation at the wrong time. Congress should be focused on policies that put Americans back to work by building sustainable economic growth – not on thinly veiled anti-regulatory shenanigans that would increase the risks to American families and the economy.