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Obama Releases Plan to Cut Business Regulatory Costs

By Alexis Simendinger

Acting to fulfill one of President Obama's State of the Union pledges, the administration on Thursday released preliminary plans by at least 30 executive departments and agencies to cut "hundreds of millions of dollars" from regulatory compliance costs imposed on businesses this year, with "billions" in cumulative savings projected in years to come.

The White House in January launched the project to survey existing federal rules as part of the president's State of the Union agenda. Obama touted the re-examination of thousands of rules that impact the private sector -- particularly small businesses -- soon after Republicans won control of the House last November. The effort is in part intended to offset criticism that the administration remains unfriendly to employers and entrepreneurs.

The president's outreach to the business community, including visits this year to select companies located in battleground states, will continue June 13 when Obama will travel to North Carolina for a meeting of his newly reconstituted Council on Jobs and Competitiveness. That advisory body is chaired by General Electric CEO Jeffrey Immelt.

"This is the beginning of what will become a new way of doing business," Cass Sunstein, the head of the Office of Information and Regulatory Affairs in the Office of Management and Budget, announced Thursday. He unveiled the preliminary results of the regulatory inventory in a speech delivered at the American Enterprise Institute. With the regulatory spring cleaning, he told reporters afterward, the president continues to "change the culture of Washington."

So, just what regulatory deadwood will be cleared immediately? Dairy interests will see relief from oil spill rules imposed by the Environmental Protection Agency, for $140 million in savings this year and more than $1 billion over a decade. The Occupational Safety and Health Administration, part of the Labor Department, erased various reporting requirements, for a savings of $45 million annually. Harmonizing hazard labeling with other nations will also save more than $500 million each year, and the Transportation Department will selectively require new equipment on some -- rather than all -- trains, for an estimated savings of more than $1 billion over two decades, Sunstein said.

Washington's tug-of-war over regulatory policy is not new. Before Obama tackled the debate this year, Presidents Reagan and Clinton used their executive authority to establish special regimes to review the costs and benefits of proposed new rules. And President George H.W. Bush put Vice President Dan Quayle in charge of a "competitiveness council" that for a time battled the president's own EPA, which was deemed overzealous and unfriendly to business.

As with the capital's recurring skirmishes over taxes, the partisan debate about regulatory burdens vs. safeguarding the public remains lively, especially during a snail's-pace economic recovery while a Democrat occupies the White House and Republicans hold the House.

Representatives of the business community responded Thursday that the administration's efforts appeared to signal "progress" -- but progress that could gain momentum if Congress and the courts get more involved.

"What we need is a plan to make our flawed regulatory system smarter, less intrusive and more accountable," said Bill Kovacs, the U.S. Chamber of Commerce's senior vice president of environmental and regulatory policy. "Any such plan must require greater congressional oversight of rules that have a major economic impact; cost-benefit analyses and science reviews conducted entirely by independent third parties to ensure quality data and to remove politics from the equation; and greater judicial access for stakeholders, so they can enforce transparency, check bureaucratic power, and hold governmental decision makers accountable," he said in a statement.

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Alexis Simendinger covers the White House for RealClearPolitics. She can be reached at asimendinger@realclearpolitics.com.

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