The White House recently instructed federal agencies to put the brakes on rulemakings related to employment. That same day, the House Judiciary Committee approved a bill that would prohibit significant rulemakings until the nation’s unemployment rate improves.
The White House’s March 20 order came out of its Office of Management and Budget and was sent to the heads of all federal agencies. It directed them to streamline regulations in an effort to simplify requirements on the public and private sectors.
“Agencies should avoid unintentional burdens that could result from an exclusive focus on the most recent regulatory activities,” OMB said, and the “effects on small businesses and start-ups deserve particular attention.”
That same day, the Regulatory Freeze for Jobs Act of 2012 (H.R. 4078) made it out of committee. The House Judiciary Committee approved the bill that would bar new significant regulations until the national unemployment rate stabilizes at or below six percent.
It defines “significant regulatory action” as any regulatory action that is likely to result in a rule or guidance that may:
- have an annual cost to the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, small entities or state, local or tribal governments or communities;
- create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
- materially alter the budgetary impact of entitlements, grants, user fees or loan programs or the rights and obligations of recipients thereof; or
- raise novel legal or policy issues.
“This administration has adopted an unprecedented amount of costly new regulations, which hinder small business growth and stall job create,” said Lamar Smith (R-Texas), chair of the committee and one of the bill’s co-sponsors. “We need to encourage small businesses to expand,” he said, “not tie them up with red tape.”
Critics, however, say the bill has little to do with job creation. “Excessive regulation is neither the cause of the jobs crisis nor a meaningful impediment to job creation,” Robert Weissman, president of the nonprofit advocacy group Public Citizen, told the Subcommittee on Courts, Commercial and Administrative Law.
Instead, he suggested, Congress should aim for better enforcement of existing rules. To achieve this, lawmakers should increase the enforcement budgets of agencies responsible for enforcing the law, Weissman said.
Two similar bills, both titled the Regulation Moratorium and Jobs Preservation Act of 2011, are pending in the House and Senate but neither has made it out of committee.