Tom Raum, Associated Press, On Tuesday January 18, 2011, 4:31 pm EST
WASHINGTON (AP) — President Barack Obama, in another move to smooth frayed ties with corporate America, ordered a far-reaching review of federal regulations Tuesday with the goal of weeding out rules that hurt job growth and creation. Republicans and business groups welcomed the step but suggested he do even more.
Business groups have bitterly complained that new regulations carrying out health care and financial overhaul, among others, are holding back hiring and economic growth.
Despite Obama’s directive, there was no indication that the White House will pull back from the biggest regulatory fights ahead: the Environmental Protection Agency’s plans to regulate greenhouse gases and rules carrying out Obama’s health care overhaul.
Obama said his executive order would “strike the right balance” between economic growth and regulations protecting the environment and public health and safety. Agencies have 120 days to submit a plan for how they intend to review existing regulations.
The move was the latest outreach by the president to repair relations with the business community following last November’s midterm congressional elections, in which Republicans gained control of the House and increased their numbers in the Senate. Some of Obama’s critics have accused him of overstepping his federal power via rules and regulations and of being anti-business.
The president announced the regulatory review in an opinion piece in The Wall Street Journal. Sometimes rules and regulations “have gotten out of balance, placing unreasonable burdens on business—- burdens that have stifled innovation and have had a chilling effect on growth and jobs,” Obama wrote.
“Regulations do have costs; often as a country, we have to make tough decisions about whether those costs are necessary. But what is clear is that we can strike the right balance.”
The executive order instructed federal agencies to scour their books for rules that place an unreasonable burden on businesses. Specifically, Obama said regulations must reduce uncertainty, be written in plain language, be built upon public participation, and identify the “least burdensome tools” for achieving the goals of the new government rules.
Still, the executive order, similar to one former President Bill Clinton signed in 1993, doesn’t cover independent agencies, including those that oversee the financial services industry such as the Securities and Exchange Commission and the Federal Reserve
The president said the review “will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades.”
Obama issued the order on the eve of a vote by the House to repeal his landmark health care law. The repeal is expected to pass the GOP-led House but not the Senate, which is still controlled by Democrats.
White House spokesman Robert Gibbs said Tuesday’s order was not tied to GOP action on Capitol Hill, and said the proposal had been in the works for several months.
Gibbs said that, while there will be those in Washington that want to “add a political label to this or that,” the president’s decision to seek the regulatory review were “a common-sense” based rather than politically motivated.
Both Republican leaders and business groups praised the president — but in cautious tones, perhaps expressing misgivings that such a review might wind up with even tougher regulations in some instances.
Obama’s action is “a positive first step,” said Thomas J. Donohue, president of the U.S. Chamber of Commerce, the nation’s biggest business organization.
But, Donohue added, “a robust and globally competitive economy requires fundamental reform of our broken regulatory system.” He called on Congress to “reclaim some of the authority it has delegated to agencies.”
Obama plans to give a speech to the chamber, with whom he has frequently locked horns over health care and financial regulation, on Feb. 7.
The National Association of Manufacturers said it “appreciated” Obama’s call for a regulatory review, but called for Obama to demonstrate results by “delaying poorly thought-out proposals that are costing jobs,” listing the EPA’s proposals to regulate greenhouse gases as a prime example.
“Manufacturers have been saying for some time that overregulation is harming job creation and stifling economic growth,” said NAM spokesman Aric Newhouse.
House Majority Leader Eric Cantor, R-Va., said Obama’s executive order “shows that he heard the same message I did in the last election — that Americans are sick and tired of Washington’s excessive overreach and overspending.
“While I applaud his efforts . we must go further,” Kantor added. He proposed more aggressive steps to strike down “needless and burdensome” regulations that plague businesses and stifle job growth.
Rep. Darrell Issa, the California Republican who chairs the House Committee on Oversight and Government Reform, applauded Obama “for joining what must be an effort that stretches beyond ideological entrenchments to identify the regulatory impediments that have prevented real and sustained job growth in the private sector.”
Brendan Buck, spokesman for House Speaker John Boehner, called Obama’s review a welcome acknowledgment that government regulations have economic consequences. But he said the president should take bolder steps immediately.
David Walker, former U.S. comptroller general, said in an interview that it was “fully appropriate to engage in a baseline review of existing federal regulations.”
But Walker, head of a balanced-budget advocacy group called Comeback America Initiative, questioned having the agencies themselves hunt for harmful regulations. “We need to have an independent review process that has transparency,” he said.
Walker said many of today’s regulations date back to the 1950s and need to be revamped.
Obama’s executive order is partly a political gesture, said Cary Coglianese, a regulatory expert and law professor at the University of Pennsylvania.
“This is a statement to Republicans in Congress as much as it is to the American people and to the president’s own Cabinet officials,” he said.
The proposal could cause a backlash among liberals, already upset over Obama’s appointment earlier this month of Chicago power broker William Daley, a Democrat centrist who was a top official for JPMorgan Chase and a former commerce secretary in the Clinton years. Obama’s courtship of the business community has produced some grumbling from the liberal Democratic base.
Obama said federal agencies won’t shy away from addressing regulatory gaps, such as new safety rules for infant formula and procedures that stop preventable infections from spreading in hospitals.
“We are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb,” the president wrote.
Different interest groups read their own interpretation into Obama’s executive order.
Scott Slesinger, legislative director for the Natural Resources Defense Council, focused on Obama’s specific mention of the Clean Air Act , on the books since 1970, as a “common sense” measure that has worked to the benefit of society.
“The president is right,” Slesinger said. “We need a balanced approach, but not one that responds to those who would put short-term corporate profits above the public health.”
Obama was “acting in the nation’s best interests” by calling for the review, said Charles T. Drevna, president of the National Petrochemical and Refiners Association. A spokesman for the group, David Egner, said the first economy-strangling rules to go should be new regulations aimed at reducing global warming pollution.
Just last month, Drevna said plans by the EPA to reduce heat-trapping gases at oil refineries — due to be proposed this summer — were “all pain and no gain” and “exactly the opposite” of Obama’s stated priorities for job creation and economic recovery.
Associated Press writers Julie Pace, Chris Rugaber, Dina Cappiello and Alan Fram contributed to this report.
