Obama Denies Being The 'Regulation President'; He's Wrong
"I know that there's a perception sometimes that there's all kinds of regulations coming out of Washington, the truth is actually we've seen fewer regulations coming out of my administration than the previous administration."
President Barack Obama, June 11, 2012.
Actually, it's more than a "perception." Companies and industries around the country have put hiring and expansion decisions on hold as they try to decide how, or whether, they can operate in the exploding regulatory environment. And that goes double for the health care, financial and energy industries.
The president's 2,700-page Patient Protection and Affordable Care Act, or ObamaCare, transfers countless new powers to Health and Human Services Secretary Kathleen Sebelius.
Over and over again in the legislation we see: "the Secretary shall establish"; "the Secretary shall promulgate regulations"; "the Secretary shall develop standards"; "the Secretary shall periodically review"; "the Secretary may develop and impose appropriate penalties"; "the Secretary may adjust the rates"; "if the Secretary determines necessary"; and "the Secretary has the authority." That's a lot of arbitrary decision-making power given to one agency.
As a result, many health insurers have been reluctant to enter new markets or develop new products - and in some cases they've quit selling health insurance or gone out of business - as they weigh the costs of new government mandates. Of course, the biggest health care hammer doesn't even hit until 2014.
Ditto the financial industry. Many banks and financial institutions, struggling under the Dodd-Frank financial reforms, have been reluctant to part with their capital. And businesses and homeowners who want to expand have had trouble getting the loans they need.
But the most aggressive regulatory body is surely the Environmental Protection Agency (EPA), which President Obama has given free reign to impose its "green dream" on the country. That dream is costing American taxpayers money and energy independence.
Although the president claims that drilling has increased during his administration, the drilling explosion has been on private lands, where he has no authority to stop it. Drilling on federal lands and offshore, which is controlled by the Obama administration, has dropped significantly. The U.S. Energy Information Administration pointed out last March that fossil fuel (coal, oil and natural gas) production on federal and Indian lands is at its lowest point in nine years.
But the regulatory roadblocks don't stop with drilling. The EPA has been pushing for a heavier hand on refineries - that is, until the upcoming election took precedence over the green dream.
Based on a settlement with state and local governments and several environmental groups, the EPA announced in December 2010 it would begin regulating greenhouse gas emissions from oil refineries and power plants. Draft regulations for refineries were supposed to be announced last December, with final rules released by November 2012.
But someone must have noticed there will be an election in November and suggested that may not be a good time to be releasing new regulations that could shut down refineries and drive up the price of gasoline. So EPA Administrator Lisa Jackson announced last March - in the midst of bad news about high gas prices, U.S. refineries closing their doors and union workers losing their refining-industry jobs - that draft rules likely will not appear until after 2012. How convenient.
The U.S. refining industry is already facing challenges from declining demand for oil, and overregulation from the EPA only exacerbates the problems. Refineries in New Jersey and Pennsylvania, representing about half of the region's refining capacity, have closed down, in part because of increased regulatory requirements, according to the Financial Times.
In addition, a major U.S. oil refinery in the Virgin Islands recently closed after entering a consent decree with the EPA and Justice Department to invest $700 million on pollution controls. The company also agreed to pay a $5.4 million penalty for violating the Clean Air Act, according to the Associated Press.
This is all bad news for future gas prices. The U.S. leads the world in refining - at least for now - processing about 21 percent of global capacity, including about 90 percent of all oil used in the U.S. China comes in a distant second. And yet no new refinery has been built in the U.S. in 35 years. The costs are just too high. Simply put, it doesn't make much difference how much oil the U.S. has if it can't be refined.
The problem President Obama faces in convincing the American people that his administration isn't on regulatory steroids is the same problem he's had convincing them he's added millions of new jobs and controlled federal spending: It just doesn't pass the personal-experience test.
And the fact that the EPA has postponed releasing the draft guidelines on new refinery regulations until after the election implies that, like health care and financial reform, the worst regulations may be yet to come.