At the end of 2011 it’s apparent that our economic recovery has been modest at best. A robust economy can be difficult to achieve under even the best circumstances, but it is made even more difficult when faced with a hostile environment for private enterprise. Manufacturers should be freed from unnecessarily burdensome regulations if they are to lead the economy. Efforts to foster economic growth and job creation have been stymied by an avalanche of overregulation from government agencies. A year-end review of the regulatory action taken by government agencies tells a sad story – one that manufacturers hope will reverse itself in the coming year.

This year alone we saw the National Labor Relations Board (NLRB), the Environmental Protection Agency (EPA), the Department of Transportation (DOT), and other agencies place more obstacles in the way of job creation and insert themselves further into the day to day decisions of manufacturers. Here are just a few examples:

2011 was a banner year for overreach for the NLRB, including the ambush elections rule, the decision in the Specialty Healthcare case, and the now-resolved complaint against the Boeing Company. These actions from the board have the potential to create disruptive and adversarial relationships between employers and employees - a result that simply isn’t conducive to growth. The NAM is currently suing the NLRB to prevent the implementation of the poster rule, a rule that has been delayed repeatedly after requests by the judge to allow time for a decision in the case. An NAM survey about the NLRB’s agenda revealed that nearly 70 percent of respondents said the NLRB’s actions will hurt job creation.

The EPA has put forth new rules and regulations that come with high price tags and puts hundreds of thousands of jobs at risk.  The costly and harmful Boiler MACT regulations checks in at $14.5 billion and threatens approximately 230,000 jobs. Sadly, it seems that the EPA may have outdone themselves with the Utility MACT rule – one of the most expensive regulations in EPA history –would have a draconian effect on power plants across the nation. According to the EPA’s own analysis, the Utility MACT regulation could cost more than $100 billion in the coming years and destroy an average of 183,000 jobs per year for the next decade.

The DOT pulled the rug out from under manufacturers that built their logistical operations based on the current trucking hours of service rule and have invested heavily in compliance since their implementation. Released just last week, the revised final rule will have a negative impact on manufacturers’ supply chains, distribution operations and productivity. To change these rules and limit the flexibility of manufacturers without sufficient reasoning is a mistake and will impede the ability of manufacturers to invest, grow and create jobs.

For manufacturers, a year living under the yoke of this overregulation is a year of living dangerously – hopefully Washington will come to its senses before it’s too late.

On Saturday the Senate approved the conference report for H.R. 2055, the final fiscal year 2012 spending measure that will fund the federal government through September 2012. The President is set to sign the bill any time before the expiration on December 23 of a six-day continuing resolution that both houses passed so that necessary steps could be taken to implement the $1 trillion omnibus.

One important provision in the spending measure that has been overlooked is language that prohibits the Interagency Working Group on Food Marketed to Children (IWG) from completing the draft report that proposed alarming guidelines for food marketing unless the IWG “complies with Executive Order 13563.” The executive order affirms the principles of sound regulations and reads:

Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation.  It must be based on the best available science.

In its proposal for sweeping guidelines for food marketing, the IWG fails to provide evidence that their recommendations would reduce childhood obesity by any measure. Furthermore, the IWG does not account for the impact of the proposed guidelines, failing to address expected costs or benefits.

According to the President’s edict, the U.S. regulatory system “must take into account benefits and costs, both quantitative and qualitative.” Moreover, the proposed nutrition guidelines conflict with standards set by other federal food programs including USDA’s Women, Infants, and Children program. The President’s executive order explicitly promotes greater coordination across agencies.

The NAM is committed to ensuring the IWG complies with the letter and intent of the legislative language included in H.R. 2055.

The food, beverage and consumer packaged goods industry in the United States employs 14 million workers, generates sales of $2.1 trillion annually and contributes $1 trillion in added value to the economy every year. The IWG’s proposal would hinder economic growth and cost jobs at a time when the economy can least afford it.

Manufacturers applaud the actions of Congress and urge the IWG to comply with the spirit of the law.

Erik Glavich is director of legal and regulatory policy, National Association of Manufacturers.

Today, the Secretary of Energy Advisory Board Subcommittee (SEAB) on Shale Gas Production released its second and final ninety-day report which analyzes the progress that has been made on the recommendations of its previous report, issued on August 18, 2011. The new report criticizes federal agencies, state governments, industry and public interest groups for not moving quickly enough on its recommendations of increased regulation on hydraulic fracturing – a critical technology that allow us to access the nation’s rich shale gas resources.

For example, the SEAB urges more regulatory action on the following areas:

• Air Emissions – Even though the Environmental Protection Agency (EPA) is currently working on regulations that would reduce emissions at hydraulic fracturing sites, the SEAB’s report claims the proposed rules do not go far enough and should be expanded to include more wells.
• Chemical Disclosure – The SEAB wants to see more disclosure of the chemicals used in hydraulic fracturing fluid and believes that there should be an extremely high bar for trade secret protection. The subcommittee quickly discounts current efforts underway including voluntary disclosure websites such as fracfocus.org and the Department of Interior’s (DOI) intent to require the disclosure of fracturing fluid composition on federal lands.
• Water Discharge Standards – The EPA is currently in the process of studying the impact of hydraulic fracturing on drinking water and has also announced a schedule setting waste water discharge standards for some fracturing activities. The SEAB, however, believes that the EPA should not wait until the study is complete to take additional regulatory actions.

The SEAB’s draft report outlines unrealistic expectations and does little to highlight the efforts that industry and regulators have already made to ensure that these activities are conducted safely. It is unreasonable to expect that industry and federal, state and local regulators could institute complex new regulatory programs in three months. Increased access to our nation’s shale gas resources means more affordable energy and more jobs for our nation’s struggling economy. The SEAB’s recommendations to pile on unnecessary and complex regulations could quickly put an end to the nation’s shale gas revolution.

Overregulation is a job killer and hurts businesses and economic growth across America. The current drive to impose more and more burdensome regulations is an albatross around the necks of manufacturers in the U.S.  You’ve heard it countless times from the NAM and other business organizations and a poll out this week from Wells Fargo/Gallup documents the fact that business owners believe the most important problem they face is complying with government regulations. 

Gallup also notes that the poll indicates that:

“Looking ahead to 2012, approximately one in three small-business owners say they are very or moderately worried about going out of business. About the same number are worried about not being able to compete with large or global competitors, not being able to hire the number of employees they need, and not being able to pay their employees. Thirty percent worry they will have to reduce their number of employees.”

As the NAM’s Manufacturing Renaissance notes, including regulatory costs it’s already 20% more expensive to manufacture in the U.S. than anywhere else in the world. Unnecessary regulations simply make it harder for businesses to succeed. These results make it clear that we need to limit the red tape and bureaucracy that manufacturers face in order to restore economic growth and job creation.

The Administration’s announcement yesterday to cut several regulations is a step in the right direction. The President and his team recognize that unnecessary burdens placed on the economy can hinder job creation and economic development. The challenge remains to apply these principles consistently across the government to new and proposed regulation.

The net benefits of these reforms, however, could be swallowed up by new, unnecessarily costly regulations that the Administration is considering – the most egregious of which is the reconsideration of the national standards for Ozone.

This is an entirely discretionary action on the part of the EPA that is under consideration. Neither the courts nor Congress can be blamed if the Obama Administration decides to impose a new regulation that imperils 7.3 million jobs and adds $1 trillion in new costs annually between 2020 and 2030. This and an assortment of other EPA rules currently proposed or under consideration can have a devastating impact on job creation and the economy.

Manufacturers hope that this announcement is just the first of many signs that the White House takes these principles seriously and will not impose discretionary or unnecessary regulatory burdens on the economy. To demonstrate their seriousness about regulatory review and job creation, the White House should follow up with another announcement returning the Ozone rule to EPA to defer reconsideration until the next mandated review period. It would be better to stop a bad regulation early than to have to engage in a “look back” to fix it after the economy feels its negative effects.

Rosario Palmieri is vice president for infrastructure, legal and regulatory policy.

Update:

Press coverage on yesterday’s announcement:

• NPR, “White House Rolls Back Regulations“
• Bloomberg, “Obama Outlines Regulations Overhall to Save Business About $10 Billion“
• Reuters, “White House: regulatory trim to save over $10 billion“

The Kauffman Foundation released data that start up firms are creating and sustaining fewer jobs than in recent history.  This is not good news for increasing job growth in this recovery. 

To help focus on this challenge the Foundation also recently unveiled a proposal to promote new business and job growth. Among the recommendations are a sunset provision for major rules that “would regularly cleanse the books of inefficient and costly rules and, thus, barriers to business formation and growth for all businesses, including startups.” 

Congress should heed this report and focus part of its job creation agenda on regulatory reform including proposals to sunset existing regulations.  Clearing out the regulatory thicket that has grown over time will help to reduce the cumulative burden of regulation and make room for new ideas and modern technology.

Erik Glavich is director of legal and regulatory policy, National Association of Manufacturers.  

A bipartisan group of House lawmakers, including Reps. John Sullivan (R-OK) and Mike Ross (D-AR), introduced legislation on July 28 that would protect the cement industry from expensive and unachievable air quality regulations. According to a press release from the House Energy and Commerce Committee, the Cement Sector Regulatory Relief Act (H.R. 2681) directs the Environmental Protection Agency (EPA) to “develop achievable and workable standards for the nation’s cement manufacturing facilities, replacing a series of complex rules affecting the sector that are projected to impose significant costs, and force plant shutdowns and job losses.”

Specifically, the bill addresses three rules impacting the nation’s Portland cement manufacturing facilities, including the Cement MACT rule, regulations impacting commercial and industrial solid waste incineration units and regulations impacting non-hazardous secondary materials. The Portland Cement Association (PCA) estimates the rules could cost over $5.4 billion, may cause 18 plants to shut down by 2013 and will put thousands of high-paying manufacturing and construction jobs at risk.

 Manufacturers believe this legislation is needed to rein in the EPA’s aggressive regulatory program, which will severely cripple an industry that is critical to U.S. construction and economic recovery. We urge similar action in the Senate. Just yesterday, in a letter to Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY), 25 Senators called for legislative action on behalf of the cement industry.

The U.S. Nuclear Regulatory Commission’s Fukushima Daiichi task force recently submitted a report to the congressional oversight committees on the first 90 days of its nuclear power plant review which examines the safety of nuclear energy facilities in the United States. The report also provides recommendations to improve the U.S. facilities’ safety procedures.

Since the report’s release last week, Chairman Jaczko has announced that the Commission should review the suggestions within 90 days; and, for the industry to implement those suggestions within five years. While the Chairman claims that the 90 day review is ample and just, many in the nuclear energy industry would argue otherwise. In fact, any speedy regulation for the sake of regulation will be a roadblock for further developing the U.S. nuclear energy industry.  Additionally, the negative economic impact of burdensome proposed regulations will not just kill existing jobs, but also preventing the creation of new ones.

Since the events at the Fukushima Daiichi plant in Japan, U.S. nuclear facilities have been in the forefront of providing support. Additionally, they have been examining their own plants to expand on the safety measures that are already in place. The industry as a whole has always been committed to safety and will continue to be in order to ensure consumers have access to safe, clean, dependable and affordable source of energy, particularly manufacturers that use nearly 30% of the nation’s energy.  As a result, the Commission should take its time in reviewing any suggestions by the report.  Furthermore, the Commission should allow for deliberations that include stakeholders’ input in order to make certain that any regulations moving forward are balanced and provide for increased safety without a negative economic impact to the industry that would result in job loss and increase the cost of energy.

Today, Senator Susan Collins (R-ME) and Senator Ron Wyden (D-OR) introduced bipartisan legislation that would stay the current Boiler MACT regulations. These regulations would stifle economic growth and threaten tens of thousands of manufacturing jobs. The National Association of Manufacturers joined a number of organizations, sending a letter to the Senate in support of this bipartisan legislation.

Senators Collins and Wyden issued a press release outlining the legislation, which will delay the costly and burdensome regulations, providing ample time for the Environmental Protection Agency (EPA) to craft a realistic and achievable final rule.

Specifically, this legislation would:

• Ensure the rules are stayed for an adequate and certain period, as the EPA’s current administrative stay is being challenged;
• Allow the EPA adequate time to re-propose the rules and get them right, including time for stakeholders to conduct more emissions testing and to avoid mistakes that occur when rulemakings of this scope and importance are rushed and become vulnerable to legal challenge;
• Provide direction and support for the EPA to use the discretion it already has under the Clean Air Act and Executive Order 13563 to add flexibility and make the rules achievable;
• Clarify that various materials, such as biomass residuals, are fuels and that certain gases in manufacturing processes do not result in boilers being treated as incinerators; and,
• Give facilities more time to comply with the complex and capital-intensive requirements of the rules.

This bill is similar to H.R. 2250, the EPA Regulatory Relief Act of 2011, bipartisan legislation introduced earlier this month in the House of Representatives.

At a time of record unemployment, the last thing manufacturers need to face are excessive regulations that will increase the cost of doing business and diminish their ability to successfully compete in the global marketplace.

If the EPA continues to pursue its aggressive regulatory agenda on the Boiler MACT rules, manufacturers will be unable to make future investments, create jobs, and spur economic growth during a time when these actions are needed most.

The Nuclear Regulatory Commission (NRC) conducted a study of the events of the Fukushima disaster and generated a report  on the fallout and what could be done to prevent it. Additionally, they reviewed the safety features of nuclear energy facilities in the United States as a reliable source of power.

This report will be part of discussions moving forward on how to maintain the strong safety record of the nuclear industry in the U.S. As the National Association of Manufacturers (NAM) continues to review the report, it is important to keep in mind that adding costly, unnecessary and reactionary regulations, simply for the sake of regulations is not the solution. This will only prevent job creation and growth within the industry.

The NAM has long been an advocate of nuclear power as one of the many sources of energy needed to meet the growing demands of our nation. We agree with President Obama that Nuclear energy is a “necessary investment” in the future of our nation. The NAM believes in an “all of the above” approach when it comes to our nation’s energy portfolio, and nuclear power has shown to be a safe, effective, clean and reliable source that generates roughly 20 percent of the energy our nation uses.

Coverage of the Report:

•  UPI: Differences between U.S. and Japanese nuclear regulations