Business world bracing for flood of new regulations from Obama

The Hill has bad news for businessmen as the second term of Barack Obama begins, and … more bad news.  First, businesses foresee a flood of regulations as Obama uses the executive branch to push an agenda that has no chance of getting through Congress:

President Obama has begun to wield the power of the executive to press forward with a second-term agenda that delights the left and terrifies the right.

When he said “we must act” in his inaugural address last week, liberals cheered him on, and conservatives saw that the electoral earthquake of November is likely to be followed by a tsunami of executive orders and regulations.

Lawmakers, lobbyists and policy groups say they are expecting a deluge of new rules from agencies across the federal government.

“They’re going to try to do with regulation what they cannot do with legislation,” said Mike House of Hogan & Lovells, a law and lobbying firm whose clients include businesses and trade groups.

Advocacy groups and liberal lawmakers are drawing up wish lists of new regulations that would cover everything from air pollution to vehicle safety to labor protections. And that doesn’t include a torrent of forthcoming rules required by the healthcare law and the Dodd-Frank financial reform act.

That won’t exactly surprise anyone here at Hot Air, but it’s beginning to sink in with the less attentive.  Bloomberg, for instance, notes that regulators don’t pay much attention to the costs of their expanded regulations:

Believe it or not, U.S. financial regulators don’t have to calculate the economic impact of the rules they write. It’s an omission they should correct before it becomes a serious obstacle to fixing the financial system.

The term “cost-benefit analysis” is gaining prominence as the battle over the 2010 Dodd-Frank financial-reform act moves into the courts. Lawyers working for corporate lobbies have challenged several rules on the grounds that the authors failed to fulfill adequately a legal requirement: Regulators must evaluate or consider — not necessarily quantify — the costs and benefits of new rules.

Courts have already struck down two Dodd-Frank rules, one designed to curb speculation in derivatives markets and another aimed at giving shareholders more say in the selection of corporate directors. The next targets could be higher-profile items, including the forthcoming Volcker rule, which seeks to prohibit short-term speculative trading at federally insured banks.

It’s easy to portray the legal challenges as typical financial-industry tactics. Problem is, they’re effective because they have a valid argument. Regulators’ cost-benefit assessments have largely failed to meet the low standards set by the law. And even if they succeeded, they would still fall short of what common sense demands.

Bloomberg’s editors don’t exactly take alaissez-faire perspective, either, which a full read makes clear.  If anything, that underscores the lack of concern over the impact of regulation.  When even those who want broader regulation complain that the expansion is irrational, counter-productive, and ignorant, people should be sitting up and taking notice.

Of course, Obama does have an advisory group that could help him out.  Two years ago, after getting spanked in the midterm elections, he created a Jobs Council to rebut criticism that his administration had no real experience in private-sector executive competence.  If anyone could convince Obama to get more disciplined about the cost-benefit analyses of proposed regulatory expansion in order to protect businesses from economic harm, it would be the Jobs Council.

They’ll have to hurry to do it, though:

If President Obama does not reauthorize his job council this week, the move will likely spark criticism from Republicans and could disquiet some Democrats. …

The Jobs Council has met in full only four times in its two-year existence, according to its own website, though it also held 18 “listening and action sessions” around the nation. Obama last year praised it as “a work council” rather than “a show council” and said that the White House had taken action on 33 of the 35 executive actions that the council had recommended.

But doubt now hangs over the question of whether the council’s original charter will be extended beyond its two-year term, with a White House aide telling The Hill that it “was only intended” to last that long.

The council hasn’t met in months, an issue that came up during the presidential campaign but didn’t have much impact in the end.  Perhaps that’s why Obama hasn’t renewed its charter, but Democrats will have a tough time defending its expiration.  The ads in 2014 pointing out that Obama laid off his own Jobs Council will practically write themselves, especially if we aren’t seeing any significant job creation and expansion of the work force by that time.

Of course, Obama may simply not care by then, either.  He won’t have to run for election again, and has little need for fig leafs to cover his left turn in the second term.

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David Strom 10:01 AM on January 30, 2023