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Shawn Vestal: ‘Job-killing’ regulations not so deadly – or even real

Wed., Dec. 21, 2011

You’ve heard, no doubt, of all the burdensome and complex regulations that are ruining the economy.

But what, exactly, are they? Specifically? Are there any examples?

Indeed there are, curious reader. There are many, many, many examples, each more heart-rending than the last. And some of them have been compiled in a report from the Senate Republican Conference, titled “The United States of Regulation.”

“Small businesses are being hurt in each of America’s 50 states by Washington’s red tape,” the report says. “Washington regulations are often burdensome, expensive and time consuming. In 2011 alone, the Obama Administration’s proposed and final rules have a cost of over $230 billion and will impose 120 million hours of paper pushing.”

The report provides one example from each state. Washington’s involves the story of Dixie Kolditz, of Cathlamet, a small town on the Columbia River. Kolditz and her husband own a home décor business that imports items from Africa and Asia. Sometimes, their shipments are inspected to make sure they’re not breaking rules against, for example, importing “raw wood” illegally, Kolditz testified in February before a House committee. These inspections can be quite costly – she noted that one of them cost her $1,705.

There are also Homeland Security inspections. Kolditz suspects that, while Homeland Security is important and all, maybe all these inspections are a money-making scheme for the federal government.

A customs official later noted that the fees are charged by private companies, not the government.

Kolditz also testified of her concern that an important government program was not being renewed quickly enough. This government program allows people like Kolditz to avoid paying duties on certain items imported from certain countries.

She urged Congress to renew the program quickly, and offer refunds for the interim period in which duties were paid.

It has done so. Obama signed the extension in October.

Another example occurred in Idaho. A representative of the J.R. Simplot Co. testified about difficulties the company faced in getting a hazardous materials permit. The major problem was that a Minnesota state department had been enforcing its rules and the federal government had not overruled them.

The examples grow more fascinating. M.L. Mackey, CEO of Beacon Interactive Systems, a Defense Department contractor, testified in May on a proposed executive order requiring that government contractors disclose political contributions.

Mackey said this was likely to “politicize the procurement process … which should be completely independent and transparent.” It would also invade the privacy of senior managers, and stifle the “grass-roots” contributions of people who might want to donate privately. Some small businesses might decide it’s not even worth it to do business with the federal government.

“None of these consequences are acceptable,” Mackey said.

Luckily for job-creating government, none of those consequences is occurring. The executive order remains on hold; efforts to require contractor disclosure in Congress stalled.

But is small business safe? Oh, no. A short-rail company in Indiana complained that federal rules requiring safer locomotives will force it to neglect the safety of its rail lines. A business consultant from Atlanta testified that the yet-to-be-implemented “Obamacare” drove the value of her company from $1.2 million to zero.

A guitar company complained that it had been caught with illegally logged rosewood from Madagascar. Trucking companies said that new regulations requiring drivers to stop periodically so they don’t fall asleep at the wheel will destroy them. A Maryland jeweler estimated that a new paperwork requirement was going to cost her $35,000 a year to meet.

Fortunately, that paperwork requirement was repealed by Congress before it could take effect. Signed by Obama in April.

That is by no means the only example in the report of deep concerns over the complexity and burdensomeness of regulations that do not, upon further investigation, exist. A Louisiana rice farmer worried that he might be required, someday, conceivably, to have a permit for putting pesticides into a waterway. A Florida ice cream company expressed concerns that it would not be exempted – as seemed likely – from oil-spill regulations. A for-profit education company said that fears of impending, unspecified regulations are causing its enrollments to drop.

Not every example is ridiculous. Take the new standards for toxins in smokestack emissions. These standards are decried as the job-killer of all job-killers. An Indiana chamber of commerce official says they’ll wreak havoc with the entire state’s economy. A Louisiana concrete company claims it will no longer be able to help with the vital rebuilding of New Orleans.

The industry estimates it will cost $14.3 billion to comply. Of course, it will also save an estimated 6,500 lives a year – people who won’t get sick from toxic air pollution.

But that’s not the upside. The upside is this: Somebody has to manufacture all this new, job-killing technology. The economic impact, one executive predicts, is expected to be $12 billion to $24 billion.

Shawn Vestal can be reached at (509) 459-5431 or Follow him on Twitter at @vestal13.

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