The Faulty Flood Forecast of Favored Special Interests
Written by Brad Walker, MCE Rivers Director
How regulations save money, create jobs and protect the public
You have all probably noticed this phenomenon; Americans (or at least a portion of us) are always going to war. I am not speaking of those actual wars we have had over the last couple of decades but the other ones like the “war on drugs”, “war on poverty”, “war on Christmas”, “war on coal”, etc. The only thing we seem not to have a war on is, well, war.
The U.S. Chamber of Commerce is gearing up for its eternal war on regulations. This appears to occur more often when there is a Democratic president. The intent is to counter the alleged tendency of lame duck presidents to establish a legacy of concern for people and the environment through new regulations that would protect and preserve them.
According to a December 5, 2013 article from the Insurance Journal there’s a “Flood of Regulations Coming from Obama Administration” and the Chamber is going to save us from this flood. Since I think a lot about floods I thought I should look into this one.
The article states that President Obama has issued 240 economically significant rules, versus only 191 from President George W. Bush and 188 from President Clinton; implying that there is some sort of magic number for regulation. This is actually a meaningless and simplistic comparison. The increase could be the result of societal changes; a near depression caused by a lack of financial regulation; increasing environmental concerns such as climate change, toxic chemicals coming from drinking water taps, tar sands and the hydraulic fracturing for oil and gas; and the lack of necessary regulations approved by the previous two presidents.
According to the Chamber’s website:
The Chamber’s Plan to Achieve Regulatory Reform
- Simplify, streamline, and increase the transparency of agencies’ rulemaking processes.
- Pursue comprehensive regulatory reform that alleviates the overwhelming and unclear regulations that damage businesses’ confidence, causing them to hesitate before investing and hiring.
- Improve the quality and clarity of regulations coming from Washington and ensure that all rules provide actual benefits rather than just costs.
No one could really argue about bullets 1 and 3, although concerns about transparency coming from the Chamber are a bit hypocritical.
As most people know, one can say pretty much anything on one’s own website, yet it’s actions that really count. The Chamber has been a strong climate change action obstructionist (until it affected their membership), and a staunch opponent of the Affordable Healthcare Act. It fights virtually any Wall Street or banking industry regulation, supports burning fossil fuels of all types, and spends about $100 million a year lobbying pursuing its agenda.
In its new report, “Energy Works for US”, the Chamber offers its “solutions for securing America’s future.” One would expect a comprehensive coverage of our many serious problems with such an assertion, but alas that is not the case. The report is framed within a narrow and totally unsustainable view of the world based primarily on the energy of the 19th and 20th centuries. Without surprise the report mentions “regulations” 54 times, nearly one for each page of text, and four specifically for greenhouse gases. But as far as the Chamber is concerned “climate change” is nonexistent; it is not mentioned a single time in a report covering our future. In fact, the only time the word climate appears is when the Chamber is talking about how to fix the business climate. A report about our energy future that focuses almost exclusively upon paving the way for increased use of fossil fuels, yet does not even mention climate change, is useless and destructive.
Just who is funding the U.S. Chamber of Commerce is protected information. We do know that the Board of Directors is comprised of high-level representatives of major corporations, some of which could benefit from the recommendations within their new report.
Who would not like to see simplified and streamlined rulemaking, as well as improvements in the quality and clarity of regulations? However, the results must be focused on improving the lives of those the government is obligated to serve – its living and breathing citizens, not those paper “persons” with INC after their names.
The Chamber implies that regulations, which are intended to protect us, are “overwhelming and unclear” and that they cost more than they provide in benefits. These allegations have been proven erroneous many times. The Office of Management and Budget (OMB) provides an annual report on the benefits and costs of regulations. On page 3 in the Executive Summary of the most recent draft report is the following assessment of regulations between 2002 and 2012:
“The estimated annual benefits of major Federal regulations reviewed by OMB from October 1, 2002, to September 30, 2012, for which agencies estimated and monetized both benefits and costs, are in the aggregate between $193 billion and $800 billion, while the estimated annual costs are in the aggregate between $57 billion and $84 billion.”
Similar results were estimated by OMB for the period from 1992 to 2002.
Another organization working hard for over 30 years to undermine protective regulations is the American Legislative Exchange Council or ALEC. This organization, along with the State Policy Network, has been drafting model state-level legislation for lawmakers from every state that undercuts the democratic process, the environment and our health and safety through a strong anti-regulation agenda. A December 5, 2013 Guardian article provides insights into how the organization works and implicates corporations as the purveyors of the legislative ideas and ALEC’s primary funding source.
EPA rules benefited the public between $112 billion and $637.6 billion in reduced health care costs, reduced workplace absences, school absences, and lost income at costs of between $30.4 billion and $36.5 billion between 2002 and 2012, according to the 2013 OMB Draft report. The ranges are attributed to the uncertainty involved with the calculations and are fully understandable when the benefits involve placing a value upon a human life. Details within the report indicate that air and water quality standards have immense benefits at relatively low costs. The overall benefits of individual regulations are analyzed in great detail, including the value of preserving and restoring wetlands described in a September 2013 report by EPA.
The anti-regulation warriors never rest. In January 2014 a new organization was setup by industry and other special interests to fight the legislative-mandated and judicially-reviewed EPA regulations for greenhouse gases. The group calls itself the Partnership for a Better Energy Future and is made up primarily of the worst polluters. Their “fundamental mission is to ensure the continued availability of reliable and affordable energy for American families and businesses,” which can be translated into “we want to change nothing,” regardless if their actions are causing environmental havoc and will ultimately cost the American taxpayer vast amounts of money and hardship. Why? Because polluters can externalize their bad behavior, shift the costs of that behavior to others, while making exorbitant profits. Who wouldn’t want to keep such a business advantage?
And state lawmakers are doing their part by drafting state-level laws to attempt to undermine EPA carbon dioxide regulations. The Virginia Senate is considering a bill that would attempt to circumvent the regulations. The bill’s sponsor denied it came from ALEC despite the wording being very similar to an ALEC model resolution that was released the same day. The Senator said he got the wording from the fossil fuel and utility industry representatives (who are likely members of ALEC).
As we pointed out in a past blog “Depression Decisions: Bad Decision Driver?”, the large government-funded infrastructure projects like locks and dams that are more than 90% taxpayer subsidized and that primarily benefit corporations do not receive similar scrutiny of their cost benefit impacts. Corporations enjoy a double standard. If they are truly concerned about government expenditures, shouldn’t the Chamber be clamoring for studies to see how effectively our tax money was spent on these projects?
The Chamber’s lack of concern indicates the difference between who benefits and who pays. Many of our river infrastructure project benefits flow largely to corporations while the taxpayers pay for them, thus, no Chamber opposition; for regulations, the corporations incur the costs (though portions are likely passed on to consumers) and the citizens reap the benefits, thus the rancor about the coming flood.
We do need to improve our system for creating good policy that protects citizens and our environment. Since a government exists to protect its citizens, the public’s well being should be a primary requirement. Also, since humans are completely dependent upon a healthy environment and adequate natural resources to survive, protecting and preserving both should be paramount. Business and economic interests, especially at a large corporate level, should fit within and serve these two requirements, not be considered superior to them.
It is especially important to understand that the manipulation of our ability to regulate bad behavior, especially when it involves wages, health, safety, and the environment, is always under pressure. This pressure is especially acute from entities like the Chamber and the majority of transnational corporations. We discussed some of this in a recent blog on the Trans Pacific Partnership (TPP): “Should our trade policy ensure greed trumps good?”, which could formalize a system for corporations to challenge regulations in every TPP nation if they believe that the regulations reduce their potential profit.
When corporations and the Chamber are screaming about new regulations, take their assertions with a grain of salt. It is more likely that the government is actually trying to watch out for your health, your safety, and your future.