House GOP targets Obama regulations

By Philip Rucker and David S. Hilzenrath
Washington Post Staff Writers
Monday, February 7, 2011; A01

House Republicans are scrutinizing a wide array of existing and proposed Obama administration regulations in areas as diverse as the environment and Wall Street, and they are taking guidance from industry groups that say the rules threaten jobs.

Responding to solicitations from Rep. Darrell Issa (R-Calif.), businesses have asked Congress to roll back or preempt more than 150 rules governing their industries, according to documents obtained by The Washington Post.

In many cases, businesses are seizing the opportunity to reopen regulatory debates that they previously lost. In his new role as chairman of the House Committee on Oversight and Government Reform, Issa will begin a series of hearings Thursday, an effort aimed at fulfilling the new GOP House majority's goal of making federal regulations friendlier to business.

The Post reviewed more than 200 letters and reports that businesses sent to Issa targeting regulations across the federal government. The rules under scrutiny include familiar issues suchas greenhouse gas emissions, health-care reform and the landmark Wall Street overhaul. But the committee also will examine more obscure regulations. For instance, makers of some cleaning products that remove mold and mildew have asked the committee to reconsider rules that require their products to be registered as pesticides under the Federal Insecticide, Fungicide and Rodenticide Act.

Among those pushing for changes are some of Washington's most powerful interest groups.

The Business Roundtable, a coalition of chief executive officers from major corporations, voiced concern about a swath of requirements, including executive pay disclosures. Smaller interests have also weighed in, such as the Kitchen Cabinet Manufacturers Association, which flagged a regulation restricting formaldehyde in pressed wood.

In December, as he prepared to assume the chairmanship of the oversight panel, Issa asked industry groups to identify regulations that "have negatively impacted job growth." He said the probe is "a starting point for the broader discussion that will unfold about the regulatory barriers to job creation.

These aren't judgments or recommendations from a congressional committee, but rather information from job creators about regulations they see as flawed and harmful to job creation and economic recovery."

In their responses to Issa, many of the industry groups broadly said that government regulations would cost jobs but did not back up their claims with evidence.

Issa's committee can turn a spotlight on the regulations, but it does not have the power to overturn or change them.

The regulatory scrutiny poses a test for President Obama as he prepares for a 2012 reelection campaign in which jobs and the economy will be major issues. The administration and congressional Democrats could choose to draw a contrast with Republicans by defending regulations intended to protect public health and safety, environmental quality and consumer and investor interests. Or they could seek common ground with the business community.

The White House has tried to strike a balance, as Obama and his new chief of staff, former corporate executive William M. Daley, have begun a campaign to patch up relations with the corporate world.

On Monday, Obama will deliver a speech at the U.S. Chamber of Commerce. And the president recently issued an executive order calling for a government-wide "look back" to modify, streamline and eliminate excessive regulations.

"If there are rules on the books that are needlessly stifling job creation and economic growth, we will fix them," said Jen Psaki, deputy White House communications director. "But we have a responsibility to protect the health and safety of the American people, and rolling back regulations that ensure access to clean drinking water, protect children from lead poisoning and put in place a safe and secure financial system on the heels of the worst financial crisis in a generation is not a responsible approach to governing."

Over the past month, the administration withdrew proposals for two new regulations that businesses opposed. One would have strengthened workplace noise standards and the other would have required employers to record their workers' musculoskeletal injuries. Both were flagged in letters to Issa.

In their letters, business leaders express alarm about the slow pace of the economic recovery and what they characterize as the growing role government is playing in the private sector.

"Business owners remain on edge regarding the tidal wave of federal government regulation that has been advanced or proposed over the past two years. . . .The pain of the harsh recession was intensified and lengthened by this hyper-regulatory environment," Karen Kerrigan, president of the Small Business and Entrepreneurship Council, wrote in a Jan. 12 letter to Issa.

Murray Energy, a coal-mining company in Alledonia, Ohio, that employs 3,000 people, told Issa that the Environmental Protection Agency's greenhouse gas and clean air rules, those existing and those proposed, "must be stopped immediately."

"Jobs and lives are being destroyed by Mr. Obama and his out-of-control, radical U.S. EPA and his appointees to it," chairman and chief executive Robert E. Murray wrote. He concluded: "America, our industry and jobs, are under siege by Mr. Obama and his U.S. EPA."

Issa did not solicit comments about government regulations from traditional critics of the corporate world, including environmental groups, consumer advocates and labor unions.

In an interview Sunday, Rep. Elijah Cummings (Md.), the ranking Democrat on the committee, voiced frustration that Issa's staff had not yet provided him with copies of the letters.

"We, too, are anxious to address regulations that might be out-dated or may be having an unreasonable impact on the production of jobs," Cummings said, but he added that Congress must weigh industry's desire to repeal regulations with environmental and public safety concerns.

"If just getting rid of regulations was the easy way to create jobs, it would've been done. These are very complex issues. . . .It's one thing to have a job, and it's another thing to know that there are regulations in place to make sure that you come home at the end of the day, that you're not harmed, and that American people are kept safe. That's the balance."

David Doniger, director of climate policy at the Natural Resources Defense Council, said Issa effectively asked companies: "Send me your Christmas list, and I'll see what I can do."

"They don't seem to be interested in finding out what's true, what's real," Doniger said. He added that if Issa "really wanted to know what was going on, you would ask both sides to come in and tell you the facts."

Issa's spokesman, Kurt Bardella, said Issa's outreach was directed intentionally only at job creators. The committee welcomes input from any other stakeholders, he said.

Many of the business groups zeroed in on existing and anticipated rules by the EPA. The long list of targeted environmental regulations include those limiting emissions from industrial boilers, pollution in the Chesapeake Bay and chemical discharges from Appalachian mountaintop coal mining.

At least 13 industry groups targeted the EPA's proposed first attempt to regulate coal ash, the waste created by coal-burning power plants. The issue gained national attention in 2008 when a coal-ash holding cell ruptured near Knoxville, Tenn., sending 5.4 million cubic yards of toxic sludge into a nearby river and countryside.

More than two dozen groups said a proposal to require utilities, manufacturers and refiners to use the most efficient technology with industrial boilers and solid waste incinerators would be unduly costly. The American Forest and Paper Association said the regulation would cost companies in the forest-products industry more than $6 billion and put "tens of thousands of jobs at risk due to mill closures."

Businesses also said new fuel efficiency standards intended to curb greenhouse gas emissions from automobiles were hurting their ability to create jobs. The Alliance of Automobile Manufacturers wrote in a Jan. 11 letter to Issa that meeting 2012-2016 fuel efficiency standards would cost the industry more than $50 billion.

Shane Karr, a vice president of the association, wrote that other new regulations involving ethanol, fuel economy labeling and rearward visibility "have the potential to impose significant additional costs on the car-buying public, and therefore also bear careful scrutiny."

Other industries opposed changes stemming from the sweeping 2010 Wall Street regulatory overhaul passed in the wake of the financial crisis.

For example, the Business Roundtable objected to a requirement that corporations disclose how the chief executive's pay compares to that of the typical employee. Computing the ratio would be "very difficult and expensive," the group said, and warned that companies could shed jobs to game the system.

"It could potentially cause companies to take actions that result in less employment, such as outsourcing, to produce better ratios," the group wrote in its Jan. 7 submission to Issa.

Also under scrutiny is a Federal Aviation Administration plan to combat pilot fatigue by mandating more rest time between shifts. The proposal came after fatigue was cited as a likely factor in the February 2009 crash of Colgan Air Flight 3407 near Buffalo.

In a letter to Issa, Nicholas E. Calio, president of the Air Transport Association, an airline trade group, wrote that the FAA "failed to link their specific regulatory changes to targeted improvements."

But not every business group wrote to Issa with a wish list. The American Cleaning Institute, a trade association for manufacturers of soaps, detergents and household cleaning products, said that it already had addressed issues with regulatory agencies "through normal channels."

"We believe our concerns will be addressed," the group's president, Ernie Rosenberg, wrote to Issa on Jan. 13. "Toward that end, ACI does not have a specific matter to bring to the attention of the committee at this point in time." Staff writers David A. Fahrenthold and Steven Mufson contributed to this report.

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