Government Builds Obstacles to Business Growth

"It's now easier to start a business in Slovenia, Estonia and Hungary — three former Iron Curtain countries — than in America." That's the conclusion reached by the editors of Investors Business Daily in response to a study measuring the regulatory hurdles confronting entrepreneurs around the globe. According to statistics compiled by the Organization for Economic Co-operation and Development (OECD), even liberal Canada requires fewer procedures to start a new business than American entrepreneurs face.

The explosion of federal regulations under the Obama administration is undeniable. For each of the president's misguided policies that have become law, there are thousands of accompanying regulations that cost billions of dollars and millions of hours of paperwork to enforce. Obamacare is one of the biggest offenders, mandating regulations that will impose an estimated $17 billion and 59 million annual hours of paperwork on the private sector, as well as $7.2 billion in extra costs to the states. According to The Economist, "the number of federally mandated categories of illness and injury for which hospitals may claim reimbursement will rise from 18,000 to 140,000." The regulation-writing bureaucrats have displayed their usual skill for the ridiculous, developing "nine codes relating to injuries caused by parrots, and three relating to burns from flaming water skis."

The Environmental Protection Agency (EPA) is another major culprit, completing or proposing 257 new regulations just in 2011.

It's not just the number of new regulations but the excessively high cost. More than 400 regulations considered under the Obama administration would cost the economy an estimated $100 million or more. Costly enough to earn the designation "economically significant," these regulations stifle economic growth and job creation -- especially for small businesses. A study released by the Small Business Administration found that regulatory costs per employee are 36 percent higher for small businesses than for larger companies.

To relieve the regulatory stranglehold on the job market, House Republicans recently passed the Red Tape Reduction and Small Business Job Creation Act. This legislation would freeze all economically significant regulations until the unemployment rate drops to 6 percent while increasing transparency in the regulatory process and giving businesses greater access to participate in the development of new regulations that affect their industries.

The bill also includes several reforms that were recommended by President Obama's own Jobs Council, such as the provision to streamline the approval process for federal construction projects. According to the U. S. Chamber of Commerce, there are more than 350 energy projects currently held up by government red tape. The Chamber estimates that removing unnecessary regulatory obstacles could "generate a $1.1 trillion short-term boost to the economy and create 1.9 million jobs annually during construction, plus $145 billion in economic benefits and 791,000 jobs during operations once the projects are built."

For a president on record as believing that the government plays a primary role in building businesses, Obama's administration has certainly done all it can to make it difficult for businesses to thrive. One need only consider the 41 straight months of 8 percent or higher unemployment and the dismal 1.5 percent GDP growth rate to determine how well these anti-business policies are working.