It’s hard to imagine a worse time for big business to conduct a full-blown attack on regulatory protections. The country continues to suffer from a deep recession caused in large part by financial deregulation and underenforcement of existing rules. A string of corporate disasters—the BP oil gusher, the Massey coal mine explosion, unintended acceleration in Toyota cars, leaded toys, killer cantaloupes—all tied directly to inadequate regulatory protections, are fresh in the public mind.
For the US Chamber of Commerce, however, the facts shouldn’t get in the way of a stupendous power grab. The Chamber and its allies on Capitol Hill have launched an unprecedented antiregulation campaign, with the goal of blocking new safeguards against corporate wrongdoing and rolling back environmental, health, financial and other regulatory protections.
“The current situation might be characterized as the Contract With America on steroids,” says Gary Bass, former executive director of OMB Watch, a DC-based advocacy group, noting political factors that make this period more dangerous than the mid-1990s. “First, these antiregulatory advocates are using high unemployment as a wedge, claiming that regulations are job killers. Second, antiregulatory forces have developed a powerful message machine.” That message, which is being funded to the tune of millions of dollars, is visible across the street from the White House, where the facade of the Chamber of Commerce is covered with a giant banner that reads: JOBS. This is the overriding public rationale for its agenda: the Chamber and its allies have created an echo chamber to describe public protections as “job-killing,” imposing burdens on the “job creators” (corporations) and preventing them from undertaking new investments. The Chamber has even created an online board game, Thiswaytojobs.com.
In reality, it was insufficient controls on Wall Street that facilitated the financial crash and the Great Recession, which threw 8 million people out of work. Even when they impose modest short-term costs on businesses, health, safety and environmental protections also commonly create jobs by spurring innovation to address new standards. But opponents of public protections discard such evidence, relying instead on deceptive studies written by those committed to bolstering their deregulation crusade. One preposterous report, issued by consultants to the Small Business Administration, twists a dubious index from the World Bank to conclude that the annual US regulatory burden is $1.75 trillion. This cost estimate largely depends on opinion polls of business leaders while ignoring the benefits of regulations altogether. Even the Bush administration found regulatory benefits to be at least twice as great as costs.
Yet intellectually hollow arguments have gained traction. Darrell Issa, chair of the House Oversight and Government Reform Committee, set the stage for the GOP obsession with deregulation in December, when he wrote to 150 trade associations and business-linked think tanks requesting a wish list of regulatory safeguards they would like to see blocked or repealed. Trade associations from the American Coke and Coal Chemicals Institute to the American Meat Institute answered the call. House Republicans have introduced at least twenty-eight antiregulatory bills, according to a tally by the Center for Progressive Reform.
Blocking regulatory protections has emerged as the centerpiece of the Republicans’ purported jobs plan. In August Eric Cantor, the House majority leader, laid out their fall legislative agenda, focused on blocking “job-destroying regulation.” Cantor has House Republicans pushing ten bills to enable corporations to escape specific regulatory controls, seven related to environmental protection, two addressing workers’ rights and one dealing with the Affordable Care Act.
Republicans are also pushing two cross-cutting proposals to grind the rule-making process to a halt. The most far-reaching is the REINS (Regulations from the Executive in Need of Scrutiny) Act of 2011, which would require Congressional approval of every regulation with a major economic impact (defined as affecting more than $100 million in economic activity a year)—an absurdly impractical requirement, given the dozens of major rules adopted by regulatory agencies every year. REINS would delay product-safety rules affecting family products like toys and cribs, complicate the FDA’s regulation of food and prescription drugs, and slow delivery of Social Security and Medicare, putting seniors at risk. It would also endanger the lives of workers employed in mines, factories and other places where standards reduce on-the-job hazards.
The second bill, introduced in September, is in a way a kinder, gentler version of REINS—and therefore a more serious threat. Its devastating potential impact is buried in technical-sounding provisions—and it has bipartisan support. Introduced by Senators Rob Portman and Mark Pryor, the Regulatory Accountability Act would subject agencies to nearly boundless inquiries into the cost of new regulations and give corporations numerous opportunities to delay rule-making indefinitely. Few major rules would ever see the light of day.
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A host of other proposals to undermine regulatory agencies’ authority may also get a serious hearing in the months ahead. Senator Susan Collins wants to give the Small Business Administration more power to lobby for lower penalties for corporate lawbreaking. Republicans wish to weaken the newly created Consumer Financial Protection Bureau, promising to block confirmation of Richard Cordray, nominated to head the agency, until the agency is defanged. Richard Shelby, the ranking minority member of the Senate Banking Committee, wants to force financial regulators to jump through a series of hoops before they issue rules to implement the recently passed Wall Street reform legislation. Consumer product companies are working to quash a new database (saferproducts.gov) where consumers can air grievances about the safety of everything from structurally deficient chairs to electronics that catch fire. The Consumer Product Safety Improvement Act has been amended to authorize increased lead exposure for children.
Finally, House Republicans have used the budget fights to advance the antiregulation agenda. In the debate over the “continuing resolution” that passed in April, eighty riders were proposed that would have prohibited agencies from enforcing or adopting particular rules. (Almost none passed.) Appropriations bills moving through Congress for fiscal year 2012 are laden with regulatory riders. Republicans also want to cut agency enforcement budgets, proposing, for example, slashing the already meager budget of the Commodities Futures Trading Commission, which is tasked with regulating the market for derivatives—the very financial instruments that were central to the financial collapse.
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In response to such an onslaught, one might hope President Obama would offer a ringing defense of the people’s interests over those of corporations. But such hopes have been dashed. Anxious to blunt accusations of being anti-business in advance of 2012, the White House has wavered in its support for public protections. In an op-ed in the Wall Street Journal in January, the president echoed many of the Chamber of Commerce’s talking points, including warnings about “burdens that have stifled innovation and have had a chilling effect on growth and jobs.” With about a dozen disparaging comments on regulation stuffed into a 900-word column, Obama promised, “We are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb.” Soon afterward, Cass Sunstein, who heads the Office of Information and Regulatory Affairs, which reviews federal regulations, blogged about the manifold efforts by the White House to reduce purported regulatory burdens on small businesses.
The White House has watered down or quashed a series of public health, consumer and other regulatory protections ready for implementation. Early this year, saying it wanted “greater input from small businesses,” it withdrew a proposed requirement—$4 the first year and 67 cents in subsequent years—that would have created a simple and inexpensive way for employers to track repetitive stress injuries. More recently, the White House ordered the withdrawal of smog rules that would have complied with the Clean Air Act, a craven capitulation to the Chamber of Commerce and the polluter lobby.
Obama’s regulatory record does include some steps forward. He has appointed a number of relatively strong, public interest–minded leaders to top regulatory jobs and has beefed up agency enforcement budgets—not to where they should be, but in many cases far above Bush-era levels. His administration has also moved ahead on some important rules, such as heightened fuel efficiency standards for vehicles. And even as it has too often echoed the big business framing on regulatory policy, it has opposed the House Republican legislative agenda.
The next year is unlikely to bring passage of the REINS Act or the most hostile antiregulatory proposals. But almost everything else is up for grabs. Enough centrist Senate Democrats may embrace proposals like the Regulatory Accountability Act, and other big business gifts dressed up as initiatives to protect small business, to make them legislatively viable. With its reversal on the smog rule, the Obama administration has confirmed that it is no bulwark for health, environmental, financial or other regulatory protections, and it may well back off on other important regulatory safeguards currently in the pipeline.
Although it’s true that present-day threats to public protections are even greater than they were the last time big business mobilized against regulatory protections, the good news is that it was mobilization by the public interest community that defeated the far-reaching deregulatory proposals of the Contract With America “by talking about the impacts its policy proposals would have had on real people,” as Bass recalls. For all of the corporate money spent on PR and messaging, the drive to roll back regulatory protections faces an inherent problem: the public strongly supports imposing controls on corporate wrongdoers. Polls show surprisingly solid support even for the concept of “regulation” and overwhelming support for specific protections—to ensure uncontaminated food and water, safe toys, prohibitions on bank rip-offs and much more.
Public support for strong controls on corporate wrongdoing offers some reason to hope that advocacy can push the Obama administration to a more consistent and aggressive defense of public protections. But it must be pushed. “I advocate a zero tolerance approach to the Obama administration on regulatory issues,” says Rena Steinzor, president of the Center for Progressive Reform. “Any tentative step toward triangulation and doing deals with big business should be shouted down by progressives without hesitation.”
These perilous times also afford an opportunity to do more than play defense. Just as Governor Scott Walker’s overreach in Wisconsin lit a fire under a labor-led popular movement, so the Chamber of Commerce’s attack on popular government protections provides a chance for a mobilized public to confront corporate power, insist on stronger rules to protect health and well-being, and advance an affirmative role for government in society.