WASHINGTON, D.C. — While the “fiscal cliff” of looming tax increases and spending cuts dominates political conversation in Washington, some Republicans and business groups see signs of a “regulatory cliff” that they said could be just as damaging to the economy.
For months, federal agencies and the White House have sidetracked dozens of major regulations that cover everything from power plant pollution to workplace safety to a crackdown on Wall Street.
The rules had been largely put on hold during the presidential campaign as the White House sought to quiet Republican charges that President Barack Obama was an overzealous regulator who is killing U.S. jobs.
But since the election, the Obama administration has quietly reopened the regulations pipeline.
In recent weeks, the Environmental Protection Agency has proposed rules to update water quality guidelines for beaches and other recreational waters and deal with runoff from logging roads. The National Highway Traffic Safety Administration, meanwhile, has proposed long-delayed regulations requiring auto makers to include event data recorders – better known as “black boxes” – in all new cars and light trucks beginning in 2014.
The administration also has initiated several rules to implement its health care overhaul, including a new fee to cushion the cost of covering people with pre-existing conditions.
Some GOP lawmakers fear the worst.
Obama has spent the past year “punting” on a slew of job-killing regulations that will be unleashed in a second term, said Sen. James Inhofe, R-Okla. With the election over, it’s now “full speed ahead” for federal rules limiting greenhouse gas emissions, requiring cleaner gasoline and putting controls on drilling for oil and natural gas, said Inhofe, the senior Republican on the Senate Environment Committee.
“Under an Obama EPA that has earned a reputation for abuse, American families will be subjected to a regulatory onslaught that will drive up energy prices, destroy millions of jobs and further weaken the economy,” he wrote in a 14-page report on expected EPA regulations for 2013. The report predicts an influx of regulations that “spell doom for jobs and economic growth.”
Environmental groups said fears of a second-term regulatory deluge are overstated.
“At this point it still has the appearance of being more of a trickle than a flood,” said Frank O’Donnell, president of the environmental group Clean Air Watch. “I don’t see the hard evidence” of an avalanche of rules.
He said the EPA is principally focused on meeting court-ordered deadlines, such as Friday’s deadline for a rule intended to reduce the amount of soot that can be released into the air. Other high-profile rules and initiatives are being rolled out more slowly, if at all, he added.
Randy Rabinowitz, director of regulatory policy at OMB Watch, a private group that tracks federal rules, said regulations now being released are long overdue – in some cases months or even years after federal guidelines said they should have been published.
“We’ve been disappointed that Obama has been a tepid regulator” in his first term, Rabinowitz said, adding that she hopes the administration “moves more vigorously to protect the public from harm” in a second term.
“I would love for the election to be interpreted as a mandate for Obama to move forward with stronger protections for the public,” she said.
A spokeswoman for the White House Office of Management and Budget, the gatekeeper for federal regulations, said the administration is focused on protecting public health and safety while avoiding unnecessary burdens on business.
“We intend to continue that approach moving forward, including careful analysis of costs and benefits as well as a commitment to protecting the health, welfare and safety of the American people at the same time that we promote economic growth,” OMB spokeswoman Moira Mack wrote in an email.
In January 2011, Obama ordered all federal agencies to get rid of rules that were excessively burdensome, redundant, inconsistent or overlapping. The ax fell on hundreds of regulations, with moves made to streamline tax forms, let railroad companies pass on installing expensive technology and speed up the visa process for low-risk visitors to the U.S. The administration said the moves would save businesses about $10 billion over five years and spur job growth.
But some Republicans and business groups said new regulations, on top of rules already issued by the administration, could strangle the economy just as it begins to grow.
A new study by the National Association of Manufacturers claims major new EPA rules could cost manufacturers hundreds of billions of dollars and eliminate millions of American jobs.
The report, issued in late November, said compliance costs for six major EPA regulations – including rules limiting air and water pollution from coal- and oil-fired power plants – could total up to $111 billion by government estimates and up to $138 billion by industry estimates. Construction costs could total $500 billion, it said.
Jay Timmons, president and CEO of the manufacturing group, warned of a “devastating ripple effect” that could be felt throughout the U.S. economy if federal rules are not relaxed or delayed. Some manufacturers are likely to “close their doors for good” because of EPA rules, Timmons said.
Susan Dudley, director of the Regulatory Studies Center at George Washington University and the former head of a Bush administration regulatory office, said she has not seen a postelection surge in federal rule-making.
“It doesn’t look like the floodgates are opening,” she said, adding that with four more years in office, Obama is in no rush to implement rules that could damage a fragile economy.
The slowdown fits a pattern, Dudley said. During his first two years in office, Obama published a “record-setting” average of 63 economically significant final rules per year, she said, a pace that slowed to about 50 major rules in 2011 and fewer than two dozen this year.
Dudley said she expects a second Obama term to be more like his first two years in office than his third and fourth years – in part because so many federal rules that have been started have been put on hold.
One of the most high-profile delays was on a pledge to set stricter limits for lung-damaging smog. President George W. Bush had shunned the advice of independent scientists who said the current ozone standard was too weak. Under Obama, the EPA had promised to change that, only to have the White House put on the brakes in September 2011, explaining it was acting to reduce regulatory burdens and uncertainty in a shaky economy. A new ozone rule is now likely to be finalized next year.
Other environmental regulations, including a rule to reduce greenhouse gas emissions from refineries and to lower the sulfur content in gasoline, are far behind schedule. EPA officials have said not to expect them anytime soon.
In the area of worker safety, the Obama administration said more than two years ago it would fight a resurgence of black lung disease, but a rule to set new standards for lung-damaging coal dust has languished at the Labor Department. A rule to protect workers at construction sites and glass manufacturing operations from cancer-causing silica also has been delayed.